IRELAND - The average Irish group managed pension fund dropped a further 5.7% in February, bringing the total return for 2009 to -7.5%, Rubicon Investment Consulting has revealed.

Figures from the monthly survey of 10 pension funds revealed the best performing manager during February was Standard Life Investments with a return of -5%, closely followed by Merrion Investment managers with a yield of -5.1%.

Irish Life Investment Managers produced the worst return of -6.6%, although Friends First/F&C also performed poorly with a result of -6.5%, while over the first two months of the year Standard Life remained the best manager with a return of -5.5%, and Irish Life stayed at the bottom with a figure of -9.1%.

In addition, the consulting firm noted the average return over the last 12 months  was -34.5%, although the worst performing manager in this period - Irish Life - yielded -38.1% and Eagle Star posted the best result of -29.8%.

Rubicon also revealed Irish group pension managed fund returns had been “very disappointing” over a 10-year period, with an average of -1%, which it claimed is “well below the Irish inflation rate of 3.5% per annum over the same time horizon” as it added the best performance was from Merrion Investment Managers with the only positive return of 1.3%.

Figures from Hewitt Associates Managed Fund survey meanwhile revealed the average return of its Managed Fund Index was -5.7%, while the average fund return, from a survey of 24 managers, was -5.8%.

In the Hewitt survey, the Davy Managed Fund was the best performer with a return of -3.4%, while the Standard Life Investments Consensus fund was the worst performing fund with a return of -7.2% for February.

Over a one-year and three-year period the survey findings reported the Davy Managed Fund also posted the best results of -24.9% and -10.8% respectively, compared to the average managed fund return of -34.4% and -14.2%.

Evelyn Ryder, director investment consulting at Hewitt Associates, pointed out the continuing volatility in financial markets is “adversely affecting fund performance” as the global markets are falling on the “continuing uncertainty as to the future viability of some of the world’s biggest financial institutions”.

Ryder said: “The outlook remains bleak for investors as the scale of the problems facing countries and companies across the world continues to escalate. The long term return figures are shockingly poor and the 10 year index return has now become negative for the first time in the last decade.”

Hewitt pointed out its Managed Fund Index recorded a 10-year return of -0.5%, against an average managed fund return of -1.1%, as it warned “long-term returns of this nature are unprecedented”.

“Despite the fact that inflation levels are also beginning to fall, this level of return over 10 years is very worrying. Rolling 10-year equity returns have historically averaged over 5% however they have been falling since August 2008 and are now in negative territory. The 15-year return on managed funds is 5.2% and this is approximately 2% above inflation for the same period. However 15-year equity returns are now 1% lower than they have been at any stage in the last three decades,” added Ryder.

In addition, she warned as central banks reach the limit of their ability to reduce borrowing costs and uncertainty about central and eastern European economies, “it is expected that markets will remain volatile for the next several months”.

“Investors should be mindful that it is likely that there is more bad news to come given that there is increasing speculation of nationalisations of some of North America’s largest financial institutions,” said Ryder.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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