IRELAND - Irish managed pension funds clawed back some of the losses suffered in 2008 and produced an average return of over 20% in 2009, according to figures from consulting firms.

Rubicon Investment Consulting's monthly survey of 10 managed group pension funds revealed investments generated an average return of 4.6% in December 2009, to produce a return of 3.3% in the final quarter of the year.

For the whole year, Rubicon reported an average return of 21.8% - a significant improvement on the 34.8% lost in 2008. All 10 funds produced double-digit returns last year, although they ranged from a low of 13.7% by AIB Investment Managers to a high of 29.6% from Merrion Investment Managers. (See earlier IPE article: Irish pensions drop €27bn in 2008)

The best performing funds in December were KBC Asset management and Bank of Ireland Asset Management, which both returned 5%, while Standard Life investment produced the lowest return of 4.1%. In the fourth quarter, however, AIB was the worst performing fund with a return of 1.9%, while Canada Life/Setanta took the top spot with 4.7%.

Meanwhile, the latest monthly figures from Hewitt Associates suggested Irish pension funds saw an average return of 20.7% in 2009. Data from the Hewitt Managed Fund Index, which covers 23 funds, suggested funds delivered a monthly average return of 4.4% in December, slightly below Rubicon's figures.

Hewitt also pointed out that the return of more than 20% in 2009 is despite an initial drop of 8% in the first 10 weeks of the year. It noted the improvement in performance mirrored that in the global equity markets - which have rebounded by an average of 60% since March - with Irish managed pension funds gaining 28% in the last nine months of the year.

Brian Delaney, investment consultant at Hewitt Associates, admitted 2009 has proved to be the best year overall for Irish managed funds since 2005, but warned funds "still have a long way to go to recover to the position that funds held in the middle of 2007".

He added that despite the positive 2009 result, the investment performance of the Hewitt Managed Index over the last three years still remains at -8.1%. This is similar to the average -8.2% three-year return reported by Rubicon.

"Although 2009 has given some relief to embattled Irish pension funds, their longer-term performance is still cause for disappointment for investors. The performance of the average Irish managed fund over the last 10 years now stands at 1.1% per annum, lower than the Irish inflation rate of 2.8% per annum over the same period," said Delaney.

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