Irish managed pension funds have experienced their worst quarterly performance since the Gulf War. The average managed fund fell by 14 per cent in the third quarter of the year, according to the latest figures published by Mercer Benefit & Remuneration Consultants and Becketts Employee Benefits Consultants. Only two previous quarters in the last 20 years produced lower returns.

In the fourth quarter of 1987 pension funds were down 15.5 per cent following the Black Monday crash while in the third quarter of 1990, pension funds fell by 15 per cent at the onset of the Gulf War.

Montgomery Oppenheim led the way for the three months to the end of September despite losing 11 per cent. It is also ranked first for year-to-date, three-year and five-year returns. Within equity markets, the Montgomery Oppenheim managed fund has been positioned in higher-yielding sectors such as utilities and financials.

Mr Joe O'Dwyer, head of equities at Montgomery Oppenheim, said the fund had been "overweight in some of the more economically resilient areas such as food producers and healthcare companies".

Hibernian was the next best performer, falling back by 12 per cent. Baillie Gifford and KBCAM lagged behind their competitors for this period with losses of 16.9 and 16.3 per cent respectively.

Mr Tom Murphy of Mercer said global equity markets, already in negative territory prior to the tragic events in the US, went into free-fall after the terrorist strikes before recovering slightly towards the end of the month.

Mercer advises pension investors to keep themselves informed. This applies particularly to members of defined contribution schemes and to those approaching retirement.