IAPF reports Irish portfolio moves

IRELAND - Passive management increased dramatically within Irish pension funds last year to 25.8% of portfolios, compared with 17.9% at the end of 2003, according to the Irish Association of Pension Fund (IAPF).

As a knock-on effect, the proportion of assets invested in segregated portfolios fell to 47%, down 3% on the year, while assets in unitised vehicles rose to 42% from 38%. The shift from active is mainly to passive unitised funds, says the IAPF. Around 11.5% of assets are insured.

Overall, Irish pension funds assets grew by 12.4% to €62.3bn in 2004. This compares with €55.5bn at end-2003 and €44.8bn at end-2002.

The split between asset classes remained much the same, with equities accounting for 63.1%, after 63% in 2003. Irish equities exposure rose marginally to 12.2% from 12.0%, but as Ireland was the best performing market returning 29.1%, the IAPF suggested that these holdings were in fact trimmed in 2004.

Euro-zone equities remained at 17.5%, while the UK, US and rest of Europe stayed largely unchanged at 26.8%. But Japanese equities increased by 0.6% to 3.6% and Pacific Basin holdings fell to 2.7% from 3.1%.

The proportion in fixed interest and index-linked issues stayed at 23.5%, but as equities outperformed bonds last year by 3%, in real terms this meant a moderate shift of assets to bonds from equities. The IAPF attributed this to trustees addressing funding needs in the wake of the bear market.

Real estate saw a trim back to 7.4% of portfolios from 8.7%, while the cash and short-term interest assets moved up to 4.7%.

The IAPF said the figures are based on questionnaires sent to financial institutions involved in managing pensions assets and the largest Irish pension funds were asked for data on assets not outsourced to managers.

IAPF reports Irish portfolio moves

IRELAND - Passive management increased dramatically within Irish pension funds last year to 25.8% of portfolios, compared with 17.9% at the end of 2003, according to the Irish Association of Pension Fund (IAPF).

As a knock-on effect, the proportion of assets invested in segregated portfolios fell to 47%, down 3% on the year, while assets in unitised vehicles rose to 42% from 38%. The shift from active is mainly to passive unitised funds, says the IAPF. Around 11.5% of assets are insured.

Overall, Irish pension funds assets grew by 12.4% to €62.3bn in 2004. This compares with €55.5bn at end-2003 and €44.8bn at end-2002.

The split between asset classes remained much the same, with equities accounting for 63.1%, after 63% in 2003. Irish equities exposure rose marginally to 12.2% from 12.0%, but as Ireland was the best performing market returning 29.1%, the IAPF suggested that these holdings were in fact trimmed in 2004.

Euro-zone equities remained at 17.5%, while the UK, US and rest of Europe stayed largely unchanged at 26.8%. But Japanese equities increased by 0.6% to 3.6% and Pacific Basin holdings fell to 2.7% from 3.1%.

The proportion in fixed interest and index-linked issues stayed at 23.5%, but as equities outperformed bonds last year by 3%, in real terms this meant a moderate shift of assets to bonds from equities. The IAPF attributed this to trustees addressing funding needs in the wake of the bear market.

Real estate saw a trim back to 7.4% of portfolios from 8.7%, while the cash and short-term interest assets moved up to 4.7%.

The IAPF said the figures are based on questionnaires sent to financial institutions involved in managing pensions assets and the largest Irish pension funds were asked for data on assets not outsourced to managers.