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Irish managed funds decline further in June

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  • Irish managed funds decline further in June

IRELAND - Irish managed funds have declined for the second month in a row as the average fund fell by 1.8% in June.

Figures from Rubicon Investment Consulting's survey of 10 managed funds showed the Standard Life and Eagle Star/Zurich Life produced the best returns, falling by 1.5% each, while Canada Life/Setanta Asset Management was at the bottom of the table with a loss of 2.7%.

The results, which followed an average loss of 2.8% in May, mean the second-quarter returns for 2010 was a loss of 3.7%.

However, Rubicon noted the overall return for the first half of the year was an average of 1.9%, as returns ranged from Standard Life's 3.7% figure for six months to the lowest figure of 0.4% from Aviva Investors.

In addition, the monthly survey showed all 10 funds remain in double-digit growth figures over a one-year period, averaging at 17.7%, with Standard Life Investments leading the pack with a return of 20.3%.

However, over three and five-year periods, the funds lost 9.1% and 0.2%, respectively. 

Meanwhile, data from Hewitt Associates' monthly Managed Fund index suggested uncertainty in the global equity markets in recent months was to blame for the 3.4% decline in managed funds over the second quarter.

Brian Delaney, investment consultant at Hewitt Associates, said global equities fell by 3.3% over the quarter, while Eurozone equities declined by 8.9%.

Delaney said: "The poor performance of equities has affected Irish pension funds.

"This has reduced the gains made earlier in the year, and the average managed fund is now up just 2.5% since the start of 2010."

Hewitt added that equity markets have also suffered in recent months following the uncertainty surrounding Eurozone sovereign debt, with French and German bond yields declining over the quarter as investors look to move away from the riskier sovereign debt of peripheral Eurozone countries.

Delaney added: "The decline in bond yields has led to an increase in the liabilities of the defined benefit schemes.

"Coupled with falling equity markets, pension schemes need to be wary of falling back into funding difficulties."
 

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