No letup for Irish pension funds
3 March 2009
Written by Sophie Baker
The credit crunch is not letting up on Irish pension funds,
with February recording further losses of 5.7 per cent.
In January, the average fund declined by 1.9 per cent, brining the return
for 2009 so far to -7.5 per cent.
The best performing manager during February was Standard Life Investments,
with -5.0 per cent, and Irish Life Investment Managers delivered the worst
performance of -6.6 per cent, says Rubicon.
Hewitt Associates has also released its results for the monthly Hewitt
Managed Fund survey and index for the end of February 2009, and agrees
that Irish managed funds returned -5.7 per cent. However, in its index,
Davy Managed Fund was the best performing with -3.4 per cent, yet Standard
Life Investments Consensus fund was the worst performing fund with a return
of -7.2 per cent.
The financial consultant said that the latest results will come as a blow
to investors who had hoped equity markets would begin to stabilise, but
Hewitt said it is possible that we will see further falls in worldwide
markets.
Evelyn Ryder, director of investment consulting at Hewitt Associate, said:
“The continuing volatility in financial markets is adversely affecting
fund performance. The global markets are falling n the continuing uncertainty
as to the future viability of some of the world’s biggest financial
institutions. They are also reeling from the steady flow of economic data
which is highlighting the extent of the current global recession. The
outlook remains bleak for investors as the scale of the problems facing
countries and companies across the world continues to escalate.”
Ryder added that the long-term return figures are poor, with a negative
ten-year index return for the first time in the last decade. “The
index shows a ten-year return of -0.5 per cent for Manger Funds and long-term
returns of this nature are unprecedented,” she said.
“With Central Banks reaching the peak of their ability to reduce
borrowing costs and much uncertainty surrounding Central and Eastern European
economies at the moment, markets are fearful that we have not seen the
end of the bad news. 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,” she concluded.
