Irish Economy
Irish pension managed funds rose 16.3% in 2013
By Finfacts Team
Jan 3, 2014 - 6:24 AM

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The above is from the November performance report [pdf]. The December 2013 report will be updated when available in coming days.

Aon Hewitt Ireland, a unit of Aon plc, said on Thursday that the Aon Hewitt Managed Fund Index, an index of traditional Irish pension managed funds, increased by 0.4% in December. This has contributed to the index delivering a positive return of 16.3% since the beginning of 2013.

US equity markets maintained the last three months' positive performance on the back of improved economic data. The Standard and Poor's 500 Index gained 2.4% in December, resulting in the index closing the year at its first all-time high since 1999. The equities benchmark soared 30% in 2013, its largest annual gain since 1997. Global equities rose 0.7% in euro terms in December, closing the year up 19.3%, as measured by the FTSE World Index. The Chicago Board Options Exchange Volatility Index, also known as the VIX, measures the market's expectation of stock market volatility, fell 24% in 2013, its largest decline since 2009.

On the 18th of December, the US Federal Reserve announced that it would begin to scale back its quantitative easing program. The central bank stated that it would reduce its monthly asset purchases by $10bn a month, to $75bn.

Check for December 2013 pensions chart here

Irish shares rose by 33.6% in 2013; ISEQ index back to early 1998 levels

Global shares rose 20% in 2013; Nikkei best in 41 years, Dow in 18

"Markets have reacted positively to the news that the Federal Reserve will begin to taper its bond purchasing. Following the announcement, the US Dollar rallied, reaching its highest level against the yen in over five years and US major stock market indices advanced," commented Cathal Fehily, investment consultant with Aon Hewitt.

Core Eurozone government bonds yields increased over the month of December, while peripheral Eurozone bond yields experienced a mixed month, with Italian and Portuguese government bond yields increasing; Irish bond yields falling and Spanish bond yields were unchanged.

"Irish Defined Benefit Pension Schemes (guaranteed payout) will have seen their liabilities fall in December given the rise in core yields. Positive performance from growth assets has also had a positive impact on schemes, and schemes should generally see an improvement in their funding level," continued Fehily.

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