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Average Irish pension fund slips –0.5%

IRELAND - Group pension managed funds returned an average -0.5% in November, according to new data.

“These lackluster returns were due to the fact that equity markets slowed down during November, having
risen strongly since the end of March,” said Buck Consultants.

Both Buck and Mercer Investment Consulting put the November return at –0.5%.

Buck said that the first 11 months of 2003 have seen the average fund return 10.2%. And it put the three-year return at –5.8%, while the five-year figure is 1.4%.

Mercer said the year-to-date return is 10%, the three-year return is –5.8%. The five-year number was 1.3%

“Equity markets stalled during November as all of the major markets, with the exception of Europe, produced negative returns,” Buck said. “Most of the decline in equity markets can be attributed to profit taking after several months of
strong growth.”

Mercer said it is currently talking to each Dublin investment manager over the impact of the so-called Morrogh ruling. Morrogh was a stockbroking firm that went into receivership in 2001. The high court recently ruled that shares held in Morrogh’s nominee account for clients are assets of the firm.

“Although there is no need for this ruling to cause any panic, we believe that a review should be carried out regarding the security of assets in unitised funds in the event of receivership of the investment manager,” Mercer said in a monthly update.

It said it would communicate its findings to clients “in due course”.

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