Pension fund comparison

Sligo Pilgrim

I am looking to compare the performance of the many pension funds and pension fund managers in Ireland. Mercer, Finfacts and Acumen used to publish comparative reports but these are no longer kept updated.

Any ideas about any up to date source of this information?

bridgepeople

Hi. I'm pretty sure the reason those figures are no longer published is that the industry is trying to move away from the old consensus fund model. Traditionally in Ireland there were about 10-15 different fund managers all benchmarked off the average of each others performance. This is quite a strange situation and it meant that managers rarely strayed much from the herd. The biggest issue with this was that the typical fund was about 75% in stocks and 25% in bonds which meant they got very badly hit in the dotcom crash and again in the credit crunch.

Now the emphasis is on better diversified products, including alternative assets, where managers are not benchmarked off an average.

So in short, I don't think the figures you are looking for are generally available anymore but neither do I think they were particularly useful to begin with. If you want to assess how well your current manager is doing, I would look to your current asset allocation and benchmark each asset class individually. So if your stocks were up 15% in 2012 and the market was up by 10%, then they have outperformed there and so on.

Sligo Pilgrim

Thanks bridgepeople. That is very helpful.

I'll need to look at the asset classes a little more carefully and especially how they are performing against similar stock/bonds etc.

Just thought that there might be some general guidelines which might help show the fund manager teams that are performing best and worst by averaging the performance of all their funds.

I see that is going to be challenging for the reasons you say.

bridgepeople

Two other things I'd add:

Most fund managers now are offering a range of fund products, which investors can pick and choose. So the days of the old managed funds that had stocks, bonds, a bit of cash and maybe a bit of property are on the way out. That means comparing managers is more difficult as manager A might have a really good alternatives platform whereas manager B might have a better product offering in bonds.

Secondly, it is worth bearing in mind that manager performance tends to be mean reverting. So if a manager has underperformed for the past couple of years, that can often be the worst time to sell out of that fund (not necessarily of course) and vice versa for buying into good performers.