When choosing a pension, consumers should look behind the latest set of performance statistics and consider underlying factors such as the expertise of the investment team, historic performance and investment strategies.

For those who find this a daunting task, help is at hand in the form of BCP Stockbrokers' second annual survey of leading pension fund managers in the Republic. BCP, which provides independent financial advice, interviews and analyses 14 pension fund managers and provides information on their investment style, their performance, industry ranking and decision-making processes. It helps identify which funds are best suited to which investors.

Those seeking a cautious investment approach should look to firms such as Allied Irish Bank Investment Managers (AIBIM), Friends First, Norwich Union, Progressive Life, Scottish Provident, Standard Life and Ulster Bank Investment Managers (UBIM), all of which adopt a conservative investment style, BCP says.

By contrast, Bank of Ireland Asset Management (BIAM), Canada Life, Eagle Star, Guardian and Hibernian are described as aggressive managers, better suited to those who are happy with a less conservative approach to pension investment.

In terms of individual performance, BCP finds that AIBIM's historic performance has been somewhat inconsistent in recent years while Bank of Ireland Asset Management has performed very well over the long term, but less well in the shorter term due to the cautious view it has adopted on international stock markets.

Canada Life's historical performance has been poor but this is of less relevance now that a new investment team has been brought in, BCP says.

Eagle Star has demonstrated a very strong and consistent growth performance since the inception of its funds and is identified in the report as the best performing fund on a one-year, three-year or five-year basis.

Managers who have performed strongly over a number of years include Friends First, Guardian, which can draw on the investment expertise of its London-based sister company, Norwich Union, Progressive Life, Standard Life and UBIM.

However, Irish Life's investment performance has lagged behind that of its competitors for a number of years although the company has taken some significant steps to improve its future performance, BCP says. It also offers a choice of actively managed funds or a consensus approach where asset allocation reflects the consensus mix of competitors, BCP says.

The report also identifies a number of trends in the industry including the move to passive investment management as represented by consensus or index funds. BCP notes that not so long ago, fund managers who merely matched their investments to stock market indices were condemned for laziness and for wasting company money.

"The image of passive management has been transformed and consensus/index funds are now winning praise for their consistent performance," it says.

Another factor impacting on the investment strategy of Irish pension fund managers has been the introduction of the euro which has led to a scaling down of Irish equity weightings in favour of Europe.

BCP believes this process is likely to continue over the next two to three years with the average pension managed fund's holding in Irish shares falling from 35 per cent to 25 per cent.

However, different approaches to the issue are emerging among the pension fund managers with New Ireland and BIAM having already significantly reduced their Irish shareholdings whereas Scottish Provident, Norwich Union and Canada Life have not. Copies of the report are available from BCP Pensions & Life. Telephone 01-668 4688.