IRELAND – Irish group pension managed funds returned 12.5% in 2003, according to Buck Consultants.
The firm said funds returned 2.1% in December, driven by recovering equity markets. “Over the final quarter of 2003, the average fund has returned 5.8%,” the firm added.
For the three years to December 31 2003 the average fund returned -5.0%, while returns are 1.1% over the five-year view.
Buck commented: “Irish pension funds missed out on a significant proportion of the growth in overseas equity markets as the euro strengthened against most other currencies, most notably the US dollar, which fell 17% against the euro during 2003.”
Buck’s head of investment consulting, Fiona Daly, said the hope was that returns continue to improve, with interest rates about as low as they could go.
She said that with bond yields rising people would be looking at equities. The average Irish pension fund holds around 70% of its portfolio in equities, Daly said.
She added that returns of 5%-10% over the long term was a “reasonable” expectation.