IRELAND - Irish managed pension funds moved back to positive returns after the market turmoil of the summer, as the average fund returning 1.7%, according to consultants.

Worst performer was again Bank of Ireland Asset Management, albeit they made a positive return, as the firm posted a 0.8% return compared to 2.3% for the top funds managed by Eagle Star and Standard Life Investments respectively.

Hewitt's managed fund index returned 1.9% over the same period.

In its latest survey on Irish managed pension funds, investment consultancy Rubicon noted because of "the turmoil in equity markets over the summer, pension funds have made little progress in 2007, with the average fund rising just 3.1% over the first 10 months of the year".

Judged over the year so far, AIB Investment Managers emerges as the best performing manager with a return of the first 10 months of 6.5%. Bank of Ireland Asset Management comes last in the table with a -1.7% negative return.

Returns for the past 12 months were 6.6% on average compared to 17.1% at the same time last year.

The reason for the steep drop in performance is the pronounced overweight position in Irish equities, with some funds holding up to 20% in this asset class, both Rubicon and Hewitt pointed out. [See earlier IPE coverage: Irish equity drags down pension funds, Irish pension funds 'too patriotic' say consultants]

"It is an example of 'herd mentality' at work," Hewitt noted in its Q3 edition of Invision, the survey of Irish group pooled pension funds.

"Many trustees believe that Irish managers hold such high proportions in Irish equities because they have an unfailing belief that Irish equities are more attractive investments than their non-Irish counterparts."

However, the analysts note the latest market crisis has affected the Irish stock exchange particularly badly as the ISAQ has a significant bias towards the financial sector.

If you have any comments you would like to add to this or any other story, contact Barbara Ottawa on +44 (0)20 7261 4618 or email