IRELAND – The typical Irish pension fund saw a small deterioration of its funding level during the second quarter of 2005, dipping to just under a 70% asset to liability ratio, according to figures from Mercer Investment Consulting in Dublin.
This “very slight deterioration” was ascribed by the consultants to the fact that though strong equity returns over the quarter boosted funds’ assets, the impact of lower bond yields offset this.
In the period from the beginning of 2000 to mid 2005, the typical fund’s ratio of assets to liabilities has fallen from 130% to less than 70%, hitting its lowest point ever during the second quarter of 2005.
The average Irish Pension Managed Fund rose 6.5% in the second quarter, bringing the total return for the first half of 2005 to 9.3%. The best performing asset sector was Irish equity, with the ISEQ posting a rise of 10% for the second quarter.
The managed funds’ average asset allocation at half year, were 73.8% in equity (19.1% Irish; 16.2% Euroland ex Irish; global ex Euroland 38.4%), 14.3% fixed interest (Euro-zone gov 12.9%; Non Euro Gov 0.3%; Non-gov bonds 1.1%),property 4.9%, cash 5.1% and absolute return 1.9%.
These managed pooled exempt vehicles are extensively used by pension funds and are seen as proxies for what is happening within the segregated balanced accounts of pension funds. Altogether some E5.9bn are invested in the 17 actively managed funds and a further E2bn in the nine passively managed consensus funds.
Mercer also runs a diversified funds of hedge funds database made up of four funds of funds available to Irish investors. The latest figures to end of May show a negative return of –1.1%.
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