The Aon Hewitt Managed Fund Index, an index representing the performance of traditional Irish pension managed funds, increased by 4.8% in January. This has contributed to the index delivering a positive return of 22.9% in the past 12 months. Meanwhile the mean managed fund gain for the month was 4.7% according to Rubicon Investment Consultants.
Irish pension managed funds delivered strong returns during January, as most global equity markets made gains over the month with the notable exception of the US. European markets rose on the announcement of quantitative easing by the ECB, and by the sharp fall in the Euro following the breaking by the Swiss National Bank of their Euro currency peg. The US market struggled however, as the dollar rose, oil prices fell and corporate earnings disappointed.
Merrion Investment Managers and Standard Life Investments shared the top spot with returns of 5.4% for the month, while New Ireland propped up the league table with a return of 3.6%. Over the past twelve months, the average fund return was 22.3%. Returns for the year ranged from 24.6% (Davy Asset Management) to 16.6% (New Ireland).
The average managed fund return has been a very strong 15.9% per annum over the past three years. The five-year average return is a healthy 12.0% per annum. Irish group pension managed fund returns over the past ten years have been 6.1% per annum on average.
Aon Hewitt said that oil prices continued to slide and were down 8.9% in US Dollar terms for the month of January as OPEC continue to maintain production levels despite falling prices.
Core Eurozone government bond yields decreased again in January. The German 10 year Bund yield decreased by 23 bps to 0.31%, while the French 10 year bond yield decreased by 30 bps to 0.54%. Peripheral Eurozone bond yields also decreased over the month of January with the Irish 10 year bond yield falling 11 bps to 1.13%.
" Defined Benefit pension schemes, may have seen their statutory funding position remain broadly static over January as strong asset returns are offset by a further increase in the valuation of the liabilities of pension schemes, due to bond yields continuing to decrease," commented Darragh Gavin.
LCP Ireland commented: "Long-dated AAA Eurozone Government bond yields fell again following the ECB announcement of its quantitative easing programme.
The funding level of a typical DB scheme increased as assets rose more than liabilities over the month.
All of our sample DC Schemes performed strongly in January." Full article