Managed pension funds increased by an average of 6.3 per cent during the first half of 1999, with most of their investment gains being achieved in the first quarter.

The quarterly survey produced by actuaries and benefit consultants Mercer/IPT found that the average Irish pension fund gained just 0.3 of one percentage point in the second quarter, mainly due to volatility in almost every world stock market. In the second quarter, New Ireland, the pension fund owned by Bank of Ireland, achieved the best level of performance, increasing by 2.3 per cent. This was followed by Bank of Ireland Asset Management, with returns of 2.1 per cent. Over a 12-month period, New Ireland again led the pack, showing investment returns of 11.1 per cent.

The best indication of pension fund achievement is longer-term performance. Looking at returns over a three-year period, Friends First was the top performing fund with gains of 23.2 per cent. Over five years, ESB Fund Managers achieved the highest level of performance, with its funds returning 21.3 per cent gains. ESB was followed by Eagle Star, at 21.1 per cent and Friends First, at 20.6 per cent.

Mercer/IPT investment consultant Ms Deborah Reidy said Eastern markets were the place to be for the the first and second quarters of 1999, with the US not far behind.

Far Eastern equities led the field, posting a heady 43 per cent increase for the six-month period, followed by Japanese equities with 37.7 per cent. "US equities also performed well for the Irish investor, increasing by 27.8 per cent," said Ms Reidy. "Ireland was the worst performing market by far and [was] the only equity market posting negative returns, down 2.5 per cent during the first half of the year."