EU Economy
Irish pension managed funds delivered negative returns in August
By Finfacts Team
Sep 5, 2013 - 8:31 AM

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Irish pension managed funds delivered negative returns in August, with an average return of -0.9% for the month.

Merrion Investment Managers took top spot with a return of -0.4% for the month, while Setanta Asset Management and Prescient Investment Managers propped up the league table with returns of -1.3%. With six out of eight months recording gains, managed funds have now returned 8.7% on average so far in 2013.

Setanta Asset Management delivered the strongest return over the year to date at 12.0%, while Prescient Investment Managers produced the weakest return, gaining 7.4% over the same period. Over the past twelve months, the average fund return was 12.0%. Returns for the year ranged from 14.8% (Setanta Asset Management) to 10.1% (Prescient Investment Managers).

Fiona Daly, managing director of Rubicon Investment Consulting, said: "The average managed fund return has been 8.9% per annum over the past three years. The five-year average return is 4.6% per annum. Irish group pension managed fund returns over the past ten years have been 4.9% per annum on average, compared with the Irish inflation rate of 1.7% per annum over the same time horizon. All of the managed funds surveyed outperformed inflation over this period."

Aon Hewitt, the pension consultants, said that the Aon Hewitt Managed Fund Index, an index of traditional managed pension funds, fell by -0.7% in August. Despite the negative return this month, the Index has delivered a positive return of 8.7% since the beginning of 2013.

Equity markets suffered from increased political risk in August. Minutes from the Federal Reserve's most recent meeting coupled with the increasing tensions in Syria and concerns over the conflict that could follow in the Middle East led global equities to a 1.3% loss over the month as measured by the FTSE World Index.

''Fear that the Fed may begin tapering its bond purchasing programme was the main concern this month, as it seems likely Bernanke could scale back the purchases before he steps down as chairman of the Fed,'' commented Cathal Fehily, investment consultant with Aon Hewitt. ''The increased volatility in markets could be seen as the VIX, a measure of equity market volatility commonly referred to as the 'Investor Fear Gauge' jumped 26.5% over the month, as investors became nervous about the escalating violence in Syria and possible withdrawal of monetary support from markets."

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