Wide variation in November for pension funds

PENSION FUNDS reported significant variation in performance last month, although most made some ground.

The average fund reported a return of 1 per cent but there was some distance between the 2 per cent gain reported by market leader Standard Life Investments and the 1.6 per cent loss recorded on the month by Irish Life Investment Managers (ILIM), the only fund manager to report a loss.

Standard Life’s recent gains mean it is now the strongest player for the past year in the market, with returns of 16.7 per cent since November 2009.

Irish Life, which has struggled this year, is the one manager not to report double-digit growth in the last 12 months, during which the average return has been 12.2 per cent.

The effect of the financial crisis and the bursting of the property bubble mean Irish pension funds remain in the red in the three-year period.

Since November 2007, the average Irish fund manager has been nursing losses of 5.5 per cent on their funds each year. Within this, Aviva Investors (formerly Hibernian Investment Managers) have fared the worst, with an annual loss of 8.3 per cent.

Standard Life, along with Canada Life/Setanta, have outperformed the market in relative terms, but that still means they are reporting average losses of 3.1 per cent each year since November 2007.

Losses continue for some funds over the five-year period – dating back to November 2005. On average, over this term, Irish funds have seen a loss of 0.6 per cent annually. Aviva and Kleinwort Benson Investors (formerly KBC Asset Management) are trailing their peers with annual losses over this period of 2.1 per cent per annum, while Eagle Star/Zurich is the best of the four managers to report gains over the period, with growth of 1.7 per cent annually.

Only Kleinwort Benson and AIB Investment Managers are in the red over the one-year period, but the average fund manager gain of 0.7 per cent per annum continues by some distance to undershoot the average rate of inflation over the same period – 2.3 per cent each year.

Eagle Star’s 2.3 per cent annual return over the past decade is the only fund manager to even match the rate of inflation over the term.