IRELAND - Irish managed funds produced their first negative performance for eight months and an average return of -2.5% in October, according to figures from Rubicon Investment Consulting.

The monthly survey of 10 managed funds showed Canada Life/Setanta produced the best performance albeit it was a return of -1.1%, closely followed by Standard Life Investments with a return of -1.4%.

At the bottom of the table, AIB Investment managers reported the worst return of -3.4%, just behind Irish Life investment managers and Merrion Investment Managers which returned -3.2% and -3.1% respectively.

Despite the average drop of 2.5%, Rubicon noted the returns in the managed pension funds sector are still positive year-to-date, at around 15% for the first 10 months of 2009. However, the consulting firm said there was a difference of 14.4% between the best and worst performers over that period, as Merrion Investment Managers has posted a 10-month return of 22.2% while AIB Investment Managers returned 7.8%.

The 12-month average return also remained positive at 6.2%, yet the three-year return was still in negative territory and stood at -9%. And despite a positive 1% average return per year over the last 10 years, Rubicon noted that only Merrion Investment Managers had outperformed the inflation rate of 3% over the decade with a return of 3.4%.

Elsewhere, figures from Hewitt Associates confirmed the decline in performance in October, as the consultancy reported a -2.8% average return on its managed fund index, and an average 10-month return of 14.2%.

Betty O'Reilly, investment consultant at Hewitt Associates, said: "Equity markets declined in October, reflecting the concerns of investors on the future of the stimulus measures. Despite companies delivering better than expected Q3 earnings, most stocks appeared to have priced in the good news. Furthermore, much of the improvement in earnings is due to cost-cutting rather than growth in sales."

O'Reilly also warned there could be continued uncertainty around the long-term sustainability of the economic recovery, as the recent improvements can be attributed to the various government stimulus packages.

"We have yet to see an improvement in employment figures, and consumer spending remains under pressure.  These uncertainties caused an increase in market volatility during October," she said.

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