IRELAND - Uncertainty over Greek sovereign default and the end of the quantitative easing programme QE2 in the US led to a decline in Irish pension fund returns, with the average pension managed funds slipping by 2.1% in June.
According to figures released by Rubicon Consulting, this led to a 0.2% percentage point drop in 12 month returns, with the average fund now returning 7.4%.
Aon Hewitt noted that the Greek debt crisis had impacted global equity markets, which dipped by as much as 5% in June, with senior investment consultant Brian Delaney also citing the end of stimulus measures across the Atlantic.
“The end of the quantitative easing programme in the US could see further downward pressure as the monetary support is removed,” he said.
“While the passing of the austerity budget in Greece provides some comfort, investors will seek signs that measures passed can be successfully implemented.”
Data compiled by Rubicon further showed that the best-performing pension managed fund lost 1.8%, while Canada Life/Setanta’s option lost 2.5% compared with May.
The investment consultancy noted: “Irish group pension managed fund returns over the past 10 years have been a disappointing 0.9% per annum on average, well below the Irish inflation rate of 2.3% per annum over the same time horizon.”
June brings to an end an unstable six months for pension managed funds, with the average return over the period being -1.5%.
Of the 10 funds examined, none has reported positive returns between January and June, with the strongest returns posted by Irish Life Investment Managers, which only saw assets decline by 0.1%.