"The Hewitt Managed Fund Index posted its fifth consecutive positive monthly performance in July 2009, returning +5.7% for the month" confirmed Deborah Reidy, Investment Consultant at Hewitt Associates. The Hewitt Managed Fund Survey shows that the Irish Life Managed Fund was the best performing fund for the month of July with a return of +7.1%. The Eagle Star Managed Fund is still the best performing Managed Fund compared to its peers over a one year, three year and 5 year time horizon. The average Managed Fund was +5.6% for the month of July and the worst performing fund was the Acorn Life Managed Fund with a return of +4.0% for the month. The average return on Irish Managed Funds for the last twelve months was -12.4%.

"The equity market rally which has been taking place over the past few months continued in July and this has helped the performances of Irish pension funds. The return of the Hewitt Managed Fund Index for the first seven months of 2009 is now +11.4%. Equity markets have risen considerably from their lows in mid March and the gains recorded in July can be attributed to more positive economic data and company earnings results for the first half of 2009 which have been emerging of late" said Deborah Reidy.

"Recent earnings forecasts announced by the market's largest constituents are starting to become increasingly positive and the equity markets have reacted accordingly. The record breaking results posted by JP Morgan and Goldman Sachs for the first half of 2009 has resulted in many investors hoping that the financial crisis of the past two years may be behind us. Other market heavyweights have also boosted their earnings forecasts based on what they see as evidence that international stimulus plans, particularly in China, are beginning to work. The consensus is being formed at the moment that the estimated $1.7 trillion being pumped into economies worldwide should be enough to start a recovery. However, it remains unknown whether the stimulus packages will be sufficient to sustain a recovery".

"Equity markets may indeed retreat from their current highs over the coming weeks but it is a relief to see that market volatility is beginning to significantly subside after the turbulence of the last year. The VIX Index (known as "the fear index") which is a measure of the implied market volatility of the S&P 500 is currently trading back at pre-financial meltdown levels. The iTraxx Europe index which measures the price of insurance against corporate defaults is also trading at pre-Lehman Brothers collapse levels. Both of these statistics imply that investors are much less fearful than they were several months ago.

While the positive equity performances of the last few months have helped Irish pension funds greatly, there are still many reasons to remain cautious entering into the second half of 2009", commented Deborah Reidy. "The problem is that we may be mistaking the bottom for a recovery. Even though global economic fortunes are not deteriorating as rapidly as they once were, there are still many causes for pessimism. Unemployment and consumer spending in the major developed economies continue to deteriorate while GDP figures are contracting and the inflationary outlook remains negative. Historical evidence shows that bear market rallies can occur for over six months so investors should remain cautious".