Strong summer equity markets continued to boost the value of pension funds last month.

Markets recovered from the uncertainty caused in the wake of the terror attacks on London to end the month on a high note, with European markets challenging three-year highs.

Figures from pension consultants Heissmann show that group managed funds returned an average of 2.6 per cent last month, bringing the funds' gains in the year to date to 12.3 per cent - significantly ahead of the 10.5 per cent average in 2004.

The pension funds have benefited in particular from the strength of the dollar in 2005. While US stock markets have delivered returns of just 4.5 per cent in local currency terms in the first seven months of the year, this translates to a 16.8 per cent euro return.

Funds have benefited to a lesser degree from sterling's relative strength against the euro, although both the dollar and sterling exchange rates worked against euro-denominated funds in July amid worries about oil and security issues generally.

The best performing fund manager in July was Montgomery Oppenheim which grew assets by 3 per cent, just ahead of Eagle Star and Irish Life on 2.9 per cent.

Another strong performer in July was AIB Investment Managers (AIBIM), which has been one of the poorest performing managers in recent years.

Bank of Ireland Asset Management (BIAM), Canada Life/Setanta and Hibernian were the weakest performers in July with returns of 2.2 per cent, according to the data from Heissmann. In the year to date, Canada Life/Setanta has recorded table-topping returns of 13.8 per cent. Eagle Star and Irish Life have also grown managed pension fund assets by more than 13 per cent.

At the other end of the scale, Hibernian has seen growth of just 10.5 per cent - well behind the next poorest performer, BIAM on 11.3 per cent.

The strong performance overall in 2005 has raised figures for the last 12 months, with an average return of 19.3 per cent over the period - up for a 12-month return of 14.4 per cent at the end of June.

Over the longer 10-year term, which is more relevant for pension investment, Montgomery Oppenheim continues to lead its rivals with average annual growth of 12.9 per cent against an industry average of 10.1 per cent. It is followed by Eagle Star and BIAM.

AIBIM and KBC Asset Management continue to struggle to match their peers with average annual returns of 8.6 per cent. The same two fund managers are the only ones still to record losses over the five-year term - 1.5 per cent a year in KBC's case and 0.7 per cent annually for AIBIM.