IRELAND - Irish managed funds posted a second consecutive month of positive returns with an average yield in April of 8.7%, according to Hewitt Associates.
The monthly figures from the Hewitt Managed Fund Index showed the April performance combined with 2.6% return in March has moved Irish Managed Funds "back into positive territory for the year".
Hewitt pointed out the more than 10% return of the last two months has clawed back the losses in January and February to produce an average return for the first four months of 2009 of 2.8% compared to the first quarter figure of -5.5%. (See earlier IPE article: Irish managed funds finally see positive return)
Brian Delaney, investment consultant at Hewitt Associates, said: "Following a very difficult start to the year, with global equity markets declining by over 20% in many cases by mid-March, we have experienced a strong rally in the past six weeks. This has largely been driven by investors beginning to look past the current recessionary malaise for initial signs of recovery."
That said, he warned pension funds still have a "long way to go" before they recover the losses suffered over the last 18 months, as in 2008 the Hewitt Managed Fund Index lost 34.1% combined with 5.5% in the first quarter of 2009.
Delaney pointed out for the index to regain the full 38% decline since January 2008 it "would need to rally by 60.6% from the 31 March 2009 level".
That said, Hewitt noted the improved April returns were largely driven by the recovery in global equity markets, and it was the Irish equity market which performed best with a return of 19.6% in April, while the UK posted 12.9%, the Eurozone 13.3%, North America 10.3% and the Asia Pacific region returned 12.9%.
"We believe any extended recovery will take time to develop and expect economic data over the next 12 months to show continued weakness," continued Delaney.
"However, there are initial indications that the pace of the decline across global economies is decelerating."
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