Crossing the Rubicon

The latest news and opinion from Rubicon Investment Consulting

August the worst month for Irish pension funds since 2008

August saw the shockwave from the falling Chinese stock market spread globally. During the month, the Chinese stock market continued to decline, while economic data weakened further. In response, the Chinese government unexpectedly devalued the Yuan, and global panic ensued. Both equity and bond markets declined over the month, which resulted in the average Irish pension fund taking its biggest hit since October 2008 – at the height of the financial crisis.

Irish pension managed funds delivered negative returns during August, with the average loss being 5.9%. Setanta Asset Management were ranked top this month with a return of -4.2%, while Friends First/F&C propped up the league table with a return of -6.9%. Despite this, Irish pension funds remain in the black for the first eight months of 2015, with an average return of 5.8%. Merrion Investment Managers top the table over the year to date with a return of 9.5%, while Kleinwort Benson Investors produced the lowest return at 4.1%. Over the past twelve months, the average fund return was 11.6%. Returns for the year ranged from 17.8% (Merrion Investment Managers) to 6.8% (New Ireland), representing a difference of 11% between the best and worst performing funds over the past twelve months.

The average managed fund return has been a very strong 13.7% per annum over the past three years. The five-year average return is a healthy 11.2% per annum. Irish group pension managed fund returns over the past ten years have been 5.2% per annum on average.