Irish pension managed funds lost 1.0% on average
in January. Merrion
Investment Managers took top spot with a return of -0.2% for the month,
while Prescient Investment Managers propped up the league table with a return of
Despite this decline, managed funds have returned 13.6% on average over
the past twelve months. Standard Life Investments delivered the strongest return
over the year at 16.5%, while Kleinwort Benson Investors produced the weakest
return, gaining 11.8% over the same period.
Rubicon Investment Consulting said that the average managed fund return
has been a healthy 8.4% per annum over the past three years. "The five-year
average return is very strong, at 12.0% 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 1.6% per annum over the same
time horizon. All of the managed funds surveyed outperformed inflation over this
Meanwhile the Hewitt Managed
Fund Index, an index of traditional Irish pension managed funds, decreased by
-0.59% in January. This has contributed to the index delivering a positive
return of 14.09% in the past 12 months.
Global equity markets declined in January with the FTSE All World Index falling
-1.9% in euro terms. Risky assets have had a disappointing start to the year,
driven by weaker than expected Chinese PMI data and the US Federal Reserve
lowering its monthly asset purchases from $85 billion per month to $65 billion
Emerging market currencies also came
under pressure this month but stabilised somewhat following central bank action
in a number of countries. Emerging Markets and Pacific Basin ex Japan were both
weak in January, down -4.5% and -3.3% respectively in euro terms. North America
performed better in both local terms (-0.4%) and euro terms (-1.3%) following
solid GDP growth reported in Q4.
have experienced sharp falls in recent days following heavy losses in Asia and
on Wall Street. 2014 is shaping up to be a much more challenging year for
investors. Developing markets for example, which now account for a 50% share of
global GDP, are suffering as the US Federal Reserve begins cutting back on its
asset purchase programme," commented Brian Delaney, investment consultant with Aon Hewitt.
Core Eurozone government bond yields fell during the month of January. The
German 10 year Bund yield was down 37 bps to 1.57%. The French 10 year yield
fell 20 bps to 2.23%, while the Dutch 10 year yield fell 36 bps to 1.87%.
Peripheral Eurozone Bond yields also fell over the month, with the Italian and
Spanish 10 year bond yields decreasing 37 bps and 48 bps respectively to 3.77%
and 3.66%. The Irish 10 year bond yield slipped 16 bps to 3.31%.
"Irish Defined Benefit Pension Schemes will have seen their liabilities rise in
January given the fall in core yields. Negative performance from growth assets
has also had a negative impact on schemes, and schemes will generally see a fall
in their funding level," added Delaney.
Aon Hewitt returns for 2013 [pdf]
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