Friends First has introduced a consensus fund for Irish investors hoping to capitalise on the growing appetite here for this type of investment vehicle.

The fund will track the average return of all the main Irish-managed funds. Such investments are popular with pension fund trustees who want to ensure their funds achieve returns consistent with the average performance within the sector.

The Friends First fund will track the managed pension funds of the leading Irish investment managers and is expected to attract an initial investment of £50 million. Irish Life and Canada Life also offer a consensus fund to investors. Irish Life launched its fund three years ago. It currently manages £830 million and expects to bring in a further £500 million this year.

Pension fund trustees favour these types of funds because they allow them to ensure their investors will achieve a return which is in line with other funds by investing in broadly the same mix of assets as other Irish managed funds. This approach means the fortunes of funds are not directly tied to the various investment strategies followed by individual fund managers. The downside is investors will miss out on exceptional investment gains although, conversely, it ensures they are not exposed to exceptionally poor performances either. The charges also tend to be lower.