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