Average pension fund lost 0.6% in August

Pension funds lost money in August for the third month in a row, according to figures published yesterday.

The group managed pension fund returns show that the average Irish pension fund lost 0.6 per cent last month.

This comes on top of falls of 2.8 per cent and 1 per cent in the previous two months.

Volatile summer markets have now knocked 4.5 per cent off the value of the the average fund, reducing their average return so far in 2007 to 1.3 per cent.

"Irish pension funds continued to feel the impact of their overweight position in the Irish equity market," said Fiona Daly, managing director of Rubicon Investment Consulting.

After a number of years in which it topped its peers, the Dublin market has been one of the worst performers in 2007 - falling 10.7 per cent over the last eight months.

Irish shares account for about 20 per cent of the equity portfolio of the average Irish pension fund even though the Irish Stock Exchange accounts for just 0.3 per cent of world stock markets by capitalisation.

"The problem is compounded by the fact that the Irish stock market is heavily dominated by a very small number of large companies," said Ms Daly.

Canada Life/Setanta Asset Managers, which has had a torrid time recently, was the only fund manager to record a gain last month, growing by 0.1 per cent compared to a 1.3 per cent fall for Bank of Ireland Asset Management (BIAM).

BIAM, which has also seen significant changes in personnel, is the only fund at this stage to be reporting a loss for 2007 - down 1.5 per cent in the year to date - and is also the poorest performing fund over the 12-month, three-year and five-year periods.

AIB Investment Managers (AIBIM) has produced the best performance so far this year and over the 12-month period with returns of 3.2 per cent and 12.3 per cent respectively.

Eagle Star's 15.8 per cent return per annum over each of the last three years puts it well ahead of the average return of 13.8 per cent per annum.

Over the longer term, Irish Life's 11.3 per cent annual return is fractionally the best over five years, where the average annual return was 10.2 per cent.

Oppenheim remains the market leader over the more relevant 10-year timeframe for pension investments, with an annual return of 9.6 per cent compared to an average of 7.7 per cent.