€3bn wiped off value of Irish pension funds' last month

More than €3 billion was wiped off the value of Irish pension funds last month.

Despite a strong rally in the final week of November, the Irish market accounted for €700 million of the month's losses. At its worst, the Iseq turmoil had, by itself, put Irish pension funds €1.56 billion in the red.

Overall, group managed pension funds reported losses of 4.6 per cent in November. Canada Life/Setanta was the least affected by the turmoil, slipping back 3.3 per cent in November against 6.4 per cent for Standard Life.

As a result of last month's volatility, just two of the providers tracked by Rubicon Investment Consulting are reporting growth over the first 11 months of 2007. They are AIB Investment Managers (AIBIM) which is 2.1 per cent ahead this year and Eagle Star (1.5 per cent).

Everyone else is nursing losses with Bank of Ireland Asset Management's (BIAM) return of minus 6.4 per cent significantly under-performing the average return of minus 1.6 per cent. The next worst performer so far in 2007 is KBC Asset Managers (KBCAM) with a loss of 4 per cent.

A bullish end to 2006 means the 12-month figures are noticeably better, with an average return of 1.8 per cent and AIBIM notching up gains of 6.3 per cent. Just two fund managers - BIAM (-2.9 per cent) and KBCAM (-0.2) - have reported losses over the 12-month period.

Irish funds were again hit by their overweight position in Irish equities. Among the funds surveyed by Rubicon, Irish stocks account for 20 per cent of global equity investment at a time when the Irish market accounts for just 0.3 per cent of the world market.

The problem is exacerbated by the fact that Irish equities are skewed towards the banking, construction and airline sectors.