Pension funds lost ground in May as markets turned volatile. Investment losses were exacerbated by rising rising liabilities as bond prices rose.

The average Irish managed pension fund lost 4.2 per cent of its value last month, reducing the average performance over the first five months of the year to growth of less than 1 per cent. At the end of April, funds had gained an average of 5.3 per cent in 2006.

However, over the last 12 months, the average Irish managed fund has recorded growth of 15.6 per cent and the annual return over the last three years remains healthy at 14.6 per cent.

"Whether this is a blip or a long-term change in the direction of the markets remains to be seen," said Fiona Daly, managing director of Rubicon Investment Consulting, noting that markets had recovered some of their poise towards the end of the month.

The 4.2 per cent average loss in May comes on top of a fractional loss in April.

Standard Life and Canada Life/Setanta produced the best relative performance last month, each shedding 3.8 per cent. Bank of Ireland Asset Management (BIAM) continued to lag its rivals and recorded a loss of 4.6 per cent.

That dragged its overall performance so far in 2006 into negative territory. BIAM funds have lost 1 per cent so far this year.

At the other end of the scale eagle Star's 1.9 per cent gain to date in 2006 puts it ahead of its peers.

Standard Life's 17.8 per cent 12-month gain puts it just ahead of Eagle Star (17.6 per cent) and well clear of BIAM (10.3 per cent).

Bank of Ireland does measure up well over the longer term with 3.6 per cent growth per annum over the last five years compared to an industry average of 2.8 per cent and a market propping 0.3 per cent at KBC Asset Management. It is still some way shy of Eagle Star's 4.3 per cent per annum growth.

Over the more relevant 10-year term, Oppenheim continues to lead with average annual growth of 11.7 per cent compared to the sector's 9.2 per cent average and the 7.9 per cent recorded by laggards AIB Investment Managers.