The average Irish pension managed fund rose by 9.8 per cent in the final quarter of last year but the rally was not enough to bring returns into positive territory for the full year.
The latest figures published by Mercer and Becketts show the average fund in the Irish market fell by 5.2 to 5.6 per cent during 2001.
Bank of Ireland Asset Management and New Ireland topped the table for full-year returns while the underperformers of the year were Canada Life/Setanta and Baillie Gifford.
Mr Tom Murphy, of Mercer's, said there was little doubt investors would be glad to see the back of 2001.
"The average managed fund underperformed the annual rate of inflation by over 8 per cent, resulting in a considerable negative real return for investors." Despite the gloom of last year, Mr Murphy said that the vast majority of Irish pension funds were still in quite a healthy position.
"With the average fund returning 13.3 per cent a year over the last five years against an inflation rate running at a mere 3.3 per cent per annum, pension funds have comfortably surpassed their primary return objective over the longer term," Mr Murphy said.
All global equity markets, with the exception of Japan, made strong gains in the final quarter of last year, repairing a significant portion of the damage done earlier.
The strongest increase of 17.2 per cent was in the Pacific Basin. Last October, Becketts stated that investment performance in the third quarter of 2001 was the worst in more than 10 years.
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