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Wednesday, 17th April 2024
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Less equities produced better performance Back  
The average Irish managed fund fell by 14 per cent in the third quarter of the year according to the latest figures published by Mercer Consultants.

However, the company does not believe that pension fund trustees or pension fund members should be overly concerned at this stage.

‘This loss is the largest quarterly decline suffered by Irish pension funds in over ten years. There have only been two previous quarters in the last 20 years in which returns were lower. The fourth quarter of 1987 saw pension funds down -15.5 per cent following the Black Monday crash while in the third quarter of 1990, pension funds fell -15 per cent at the onset of the Gulf War. Unfortunately, for all the wrong reason, this quarter will also live long in our memories’, said Tom Murphy, leader of the Investment Consulting Practice at Mercer.

Montgomery Oppenheim led the way for the three months despite falling back by 11 per cent, with Hibernian the next best performer losing 12 per cent. Ballie Gifford (-16.9 per cent) and KBCAM (-16.3 per cent) lagged their competitors over this period.

‘Global equity markets, which were already in negative territory prior to the tragic events in the US, went into free-fall after the terrorist strikes before recovering slightly towards the end of the month. The world equity index fell 9.3 per cent in September alone, while the return for the quarter was -20.9 per cent These returns have severely hit Irish pension assets, given that the average fund maintains an equity weighting in the region of 70 per cent.

‘Not surprisingly, the better performers this quarter were managers who had an under weight position in equities, and within their equity portfolio maintained a bias towards the defensive sectors of the market,’ added Murphy.

The third quarter losses account for all the year-to-date declines, with the average managed fund also falling by 14 per cent over this period.

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