Most pension funds show negative return in August

THE PERFORMANCE of pension funds once again fell back in August, with an average return of -0.8 per cent for the month, according to figures published yesterday.

The negative return comes after pension funds enjoyed a rally in July, when the average Irish-managed fund returned 2.2 per cent following two consecutive declines in May and June.

Ten fund managers were included in the survey compiled by Rubicon Investment Consulting.

Eagle Star/Zurich Life was the best performer in August, with a return of 0.2 per cent for the month.

Standard Life Investments saw a return of 0.1 per cent on the month, according to the data.

All of the eight remaining funds were in negative territory for August. These include Friends First, Canada Life/Setanta, Bank of Ireland Asset Management and AIB Investment Managers.

The data shows that the average managed fund has advanced 3.4 per cent over the first eight months of the year.

Standard Life is the best performer over this time period, having advanced by 6 per cent. Aviva Investors is the worst, with a return of just 1.6 per cent.

Over the past 12 months the average fund returned 9.5 per cent, the figures show.

However, the longer-term perspective continues to be disappointing, with an annual return of -7.6 per cent for the average managed fund over the past three years.

The five-year returns to the end of August are also mostly negative, with an average return of -0.4 per cent per annum over this period.

Over a 10-year time-frame the return on Irish group pension managed funds has been -0.1 per cent per annum on average, well below the Irish inflation rate of 2.4 per cent.

Rubicon described the performance as “disappointing”, pointing out that none of the managed funds surveyed outperformed inflation over the 10-year period, while half of the 10 funds failed to deliver positive returns over the decade.