| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Irish Last Updated: Jun 4, 2010 - 8:43:55 AM

Irish pension funds fell 2.8% in May; Every fund down over 10 years after inflation
By Finfacts Team
Jun 3, 2010 - 2:54:17 AM

Email this article
 Printer friendly page

Irish pension funds gave back some of the gains made over the past three months with negative performances over the month of May. The average managed fund returned -2.8% for the month. Returns over 10 years are all down after inflation and four of ten funds were even negative in nominal terms.

Standard Life Investments took top spot with a return of -1.9% for the month, while Irish Life Investment Managers propped up the league table with a -3.9% return. In spite of this, the average managed fund has advanced 3.8% over the first five months of the year; with returns ranging from a high of 5.3% (Standard Life Investments) to a low of 2.2% (Aviva Investors). Over the past twelve months all of the managed funds surveyed delivered double-digit growth, with the average fund returning 20.0%. Returns for the past year ranged from 23.1% (Standard Life Investments) to 17.2% (AIB Investment Managers).

Fiona Daly, Managing Director of Rubicon Investment Consulting commented: "The average managed fund return has been a very disappointing -8.8% per annum over the past three years.

The five year returns to the end of May are mostly positive, with an average return of 0.8% per annum over this period. Irish group pension managed fund returns over the past ten years have been a disappointing 0.6% per annum on average, well below the Irish inflation rate of 2.5% per annum over the same time horizon. Indeed, none of the managed funds surveyed outperformed inflation over this period, while four of the ten funds failed to deliver positive returns over 10 years."

Pension consultants Hewitt Associates commented last April that over the last several years, a debate has ensued over how "active" the active managed funds were in practice. This was on the basis that very few varied their asset allocations significantly from the peer group average. For example, the vast majority of managed funds had an equity weight between 75% and 79% just prior to the credit crunch. In addition, it seemed odd that in all but 1 of the active managed funds, the Irish equity market (a small and concentrated market that comprised 1% of the global index) comprised between 17% and 22% of the total just before the market began its descent into oblivion. Similarly in more than half of funds, Irish Property had crept up over the 5% mark in spite of the obvious unsustainability of Irish property performance. Hewitt asked if these funds were truly active why was there such similarity in the asset allocations of the different funds? Accordingly employers, trustees and members have all begun asking what the definition of "active" is.

Hewitt said the investment management community has often pointed to peer group surveys as the reason they have been unwilling to actively manage their funds. They argued that if they are to be judged each quarter by their standing in the survey, they cannot accept the business risk associated with deviating from the average (and potentially underperforming that average). Therefore, the unique asset allocation of the Irish managed fund (with its historical bias to Irish equities and property) remained fairly static without justification solely because few managers found differentiation palatable. Any major shifts in allocation were predominantly due to market movements rather than active allocation.

The easy option according to Finfacts was go with the flow and collect big fees.

For those without the equivalent of the gold-plated public sector pension, in the private sector, the past decade has been a washout and it is only reasonable to expect another decade of low returns. 

Related Articles
Related Articles

© Copyright 2010 by Finfacts.com

Top of Page

Latest Headlines
Ryanair revises up full-year profit guidance
AIB bank profitable in third quarter
Ryanair announces half-year profits up 32% to €795m
Ryanair benefits from improved customer service
Ryanair to buy 100 new Boeing 737 MAX 200
Finfacts server migration Thursday
State-owned Allied Irish Banks reports H1 2014 profit as bad loan charges plunge
Ryanair reports profit in its financial first quarter soared 152%
UK firm opens van dealership in Dublin
Ryanair reports 8% fall in full-year profit; US services to commence in 2019
Global Financial Centres Index: New York overtakes London; Dublin slips to 66 of 83 cities
Bank of Ireland reports “significant” improvement in 2013 results
Sale process of IBRC UK projects Rock and Salt completed
CRH says 2014 will be year of profit growth after reporting 2013 loss
Ryanair reports third-quarter loss
Irish Water says it saved €100m in setup costs
RSA Insurance fires two Irish executives for large loss/ accounting irregularities
Bank of Ireland will have to raise provisions by €1.4bn; AIB says it's "well capitalised"
CRH reports slightly improved third quarter
Central Bank says ownership of Newbridge Credit Union transferred to permanent tsb
Ryanair reports H1 profits rose by 1% to €602m
Dublin Web Summit: Irish Stock Exchange and NASDAQ OMX announce dual listing plan
Irish pension managed funds returned to growth during September
Dan O’Brien resigns as economics editor of The Irish Times
Central Bank says no action required on Anglo tapes revelations
Ryanair flew 9m passengers and Aer Lingus carried 1.1m in August
UK Competition Commission says Ryanair must cut Aer Lingus stake to 5%
CRH reports H1 2013 revenue dip and loss
Vodafone refunded UK after discovery of Irish tax haven deal
RBS reports half year profit; Ulster Bank posts reduced loss
Bank of Ireland cuts pretax losses in HI 2013 to €504m
Irish State-owned Allied Irish Banks reports losses of €758m in H1 2013
Service Announcement
Irish managed pension funds declined in June
VHI reports 2012 surplus of €54.3m; Health insurance made loss
Ex- Elan director says management / board "not competent to run a business"
Aer Lingus to put €140m in employees pensions fund; Ryanair apoplectic
Wednesday Newspaper Review - Irish Business News and International Stories - - May 22, 2013
Tuesday Newspaper Review - Irish Business News and International Stories - - May 21, 2013
Ryanair, Europe’s biggest low cost carrier, announced Monday record annual profits of €569m - - up 13%