Buoyant equity markets and a falling euro have boosted Irish pension funds in the first half of 2005. The average Irish managed pension fund recorded growth of 9.2 per cent in the first six months of the year, according to investment consultants Mercer.
The impact of the falling euro is illustrated in the 12.5 per cent return from global equity markets in the first half of the year in euro terms. In local currency terms, the half-year return was a more modest 4 per cent.
The Irish stock market was one of the top performing markets in the second quarter, notching up gains of 10.1 per cent after a poor first quarter, bringing its year-to-date gain to 7 per cent.
Worries about economic growth in Germany and France, and concerns raised by the rejection of the EU constitution in France and the Netherlands, saw euro-zone equities underperform, Noel Collins, a senior investment consultant at Mercers said.
Canada Life has been the best performing fund manager so far this year, with a return of 11.4 per cent in the last six months, ahead of Eagle Star and Irish Life. However, it owes its position to a stand-out first quarter when its 4.4 per cent return was double the market average .
Hibernian and Montgomery Oppenheim have been the most significant underperformers in the six-month period, with Bank of Ireland Asset Managers (BIAM) and AIB Investment Managers (AIBIM) also finding themselves towards the bottom of the performance league.
Irish Life reported the highest returns both in June and for the second quarter of the year as a whole followed by Eagle Star.
Over the last 12 months, Eagle Star's 17.6 per cent return noticeably outpaced the 14.5 per cent average and the 13.3 per cent achieved by underperformer Hibernian. Over the medium term, KBC Asset Management (KBCAM) and AIBIM are still struggling to produce returns for the clients.
KBC has averaged a loss of 2 per cent of fund value each year over the most recent five-year period while AIB is also in negative territory, shedding an average of 1.1 per cent of fund value each year since June 1999.
This compares with an average return over the period of 0.9 per cent per annum and a table-topping performance from BIAM of 3.9 per cent annually over the five year.
Over the 10-year period which is considered a better reflection of performance on long-term investments such as pensions, New Ireland and BIAM reversed position as the most successful managers, recording annual growth of 11.6 and 10.9 per cent respectively against an industry average of 10.1 per cent.
AIBIM did poorest over this timeframe with an average annual return of 8.7 per cent, fractionally behind KBCAM's 8.8 per cent.
