Pension funds paid the price as the Irish stock markets fell 5.2 per cent last month. The average managed pension fund shed 1 per cent of its value to end the first half of the year on a low note.

All the fund managers lost ground in June, with Bank of Ireland Asset Management (BIAM) faring particularly badly as it gave up 1.8 per cent over the month compared to just 0.1 per cent at Oppenheim Investment Managers.

Stock market volatility took some of the sheen off second-quarter performance, with the average fund growing by 3.3 per cent in the period. But it has been a good three months for Irish Life Investment Managers (ILIM), which topped its rivals with a return of 4.7 per cent over the last quarter.

June ended on a high note for ILIM as it recorded institutional inflows of €2.4 billion over the first six months of 2007 - 20 per cent ahead of the €2 billion estimate issued in a trading statement only last month and well in excess of the €1.9 billion inflows for 2006 as a whole. Canada Life/Setanta's underperformance continued as it propped up the table with a return of just 2.5 per cent over the quarter.

So far this year, pension funds have grown by 4.7 per cent, on average. The performance is seen as encouraging, given that last month's volatility has left the Irish stock market flat over the six-month period.

The pensions industry has also been buoyed by rising bond yields that effectively reduce the size of pension fund liabilities.

AIB Investment Managers has been the strongest performer in 2007 with a gain of 6.1 per cent with BIAM lagging with less than half that return. AIB's relatively strong start to 2007 also sees it recording the best return over the last 12 months at 20 per cent.

Over the three- and five-year periods, BIAM's returns are the weakest, with Eagle Star and Standard Life outperforming over three and five years respectively.

Oppenheim remains the market leader over the more relevant 10-year period and continues to be the only fund manager posting double-digit returns each year over the past decade.

"Markets have been very challenging this year," said Kevin Gallacher, managing director of Oppenheim which manages funds of over €1 billion on behalf of institutional clients. "Oppen-heim's active, market-focused approach has delivered returns ahead of both the underlying markets and the competition."