Pension funds recorded a second successive month of strong growth in May, bringing the average gain of managed funds over the past year to 13.3 per cent.

Funds returned average growth in May of 4.5 per cent, according to a survey of investment managers by Coyle Hamilton Willis. In addition to growth above 3 per cent in April, it allowed funds recover from losses in March to gain an average of 2.5 per cent in the past three months.

The best performers in May were KBC Asset Managers (KBCAM) and Standard Life, two groups that have struggled to deliver returns in line with their peers over the longer period. Both saw the value of the pooled managed group pension funds climb 5 per cent over the month.

They performed significantly better than Bank of Ireland Asset Managers (BIAM) and its subsidiary New Ireland, both of which saw growth of around 4 per cent. Bank of Ireland is noted for its less aggressive investment style.

Industry commentators described the performance of fund managers in the past couple of months as "impressive".

The recent return to growth has seen Irish pension funds improve their average annual performance over the longer term, notably the five-year figure, which was showing an annual average loss of 1.2 per cent of the funds under management and has now returned to positive territory, according to the Coyle Hamilton Willis data.

Its survey reports growth of 0.4 per cent per annum over that timeframe, although there is still a significant gap between the strongest performer over the period - BIAM (averaging 3.3 per cent growth annually) - and the weakest - KBCAM with an average loss of 2.2 per cent each year.

Irish funds continue to benefit from the relative outperformance of the Irish stock market in recent years. Despite cutting back their exposure to the Irish market since the advent of the euro zone, Irish funds are still overweight in domestic equities.