IRELAND - Irish managed funds reported a positive performance for the fifth month in a row, after they returned of 6% in July.

Figures from Rubicon Investment Consulting's monthly survey of 10 funds showed the average return was 6%, as Irish Life Investment Managers posted the best return of 7.1% and KBC Asset Management reported the worst performance of 5.3%.

Rubicon's research showed this fifth consecutive gain means in the seven months of 2009 the average return has now hit 11.8%, although the sector is still in negative territory over a one- and three-year period with yields of -12.4% and -7.7% respectively.

The consultant said five-year returns were "marginally positive" at 0.7% a year, while over a decade the returns were a "disappointing 0.8% per annum on average".

That said, Rubicon said funds have gained an average of 20.8% since the end of February, mainly through an equities recovery, so "investors who may have moved out of equities at the end of 2008, in an attempt to avoid stock market turbulence, will have missed out on this 'bounce".

Elsewhere, Hewitt Associates' latest edition of the Hewitt Managed Fund Index revealed 23 funds generated an average performance of 5.7% in the last month, and while ILIM remained at the top of the table - in agreement with Rubicon - the worst performer in Hewitt's table was Acorn Life with a return of just 4%.

The Index figures also reported a year-to-date average return of 11.3% in 2009, although again over a one- and three-year periods the yields were -11.3% and -7.3% respectively. Eagle Star posted the best returns of -8% and -4.4% for both time frames.

Deborah Reidy, investment consultant at Hewitt, noted the equity market rally that has been taking place over the last few months continued into July and has helped the performance of Irish pension funds.

"Equity markets have risen considerably from their lows in mid-March and the gains recorded in July can be attributed to more positive economic data and company earnings results for the first half of 2009 which have been emerging of late," she added.

She warned, however, that while Irish funds have recovered in the last few months, "there are still many reasons to remain cautious entering into the second half of 2009", as it is not clear whether the stimulus packages introduced around the world are sufficient to sustain a recovery.

"The problem is we may be mistaking the bottom for a recovery," said Reidy. "Even though global economic fortunes are not deteriorating as rapidly as they once were, there are still many causes for pessimism."

She pointed out that unemployment and consumer spending in the major developed economies is continuing to deteriorate while GDP figures are contracting and the inflationary outlook remains negative.

"Historical evidence shows that bear markets can occur for over six months so investors should remain cautious," added Reidy.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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