Merrion Investment Managers look set to top the table with total return to date of 49.9%

THE FIVE participants in the Rehab Great Investment Race delivered a mixed performance in September – with only two of the five teams ending the month in positive territory.

This is the last month of the competition, in which five investment managers were given €100,000 to invest on behalf of Rehab.

The total value of the fund at September 30th stood at €522,748, marking a 4.55 per cent return on the initial €500,000 investment.

Markets continued to be tough in September amid persistent concerns about the potential contagion implications of holdings of Greek debt in Europe and doubts about the state of the US economy. The MSCI World Index fell 1.9 per cent in euro terms in the month.

All geographical regions were hard hit, with both developed and emerging markets suffering in the equity market sell-off.

However, European assets were the most affected, falling by over 9.2 per cent in euro terms as global investors sold down their European exposures.

Merrion Investment Managers – which has consistently been ahead since the race began – looked set to finish the year at the top of the table.

The fund steamed ahead in September, adding 5 per cent, bringing the total return to date to 49.9 per cent.

The key to Merrion’s strong performance during the month was a defensive stance, with the fund only making select trades, according to Alex Kinsella of Merrion Investment Managers.

“September saw market participants adopt a very defensive stance and we were no different,” he said.

The portfolio had just three opportunistic trades in September, investing in two oil-related exchange-traded funds and an European market exchange-traded fund.

“These were all short-term trades given the volatility of markets and they benefited the portfolio significantly,” said Alex Kinsella.

Rehab’s own team finished the month in second place, with a return of 2.2 per cent.

“Unfortunately, September was another very difficult month,” said team leader Frank O’Brien. “Having contemplated at the beginning of the month sticking my head up out of the trenches, I very quickly ducked down again as the newsflow deteriorated.”

The strategy of risk-avoidance paid off, with the fund outperforming the market and propelling the Rehab team – which spent most of the year in fourth place – into third place overall.

AIB Investment Managers, which has struggled since the race began due to its focus on Japanese equities, managed to finish September in third place, with a loss of 2.9 per cent on the month, as the fund was all moved to cash in the middle of the month.

Overall, the value of the portfolio now stands at €62,702, leaving AIB Investment Managers in fifth place.

Irish Life Investment Managers came in at fourth place in September with a loss of 4.1 per cent, though it is still solidly maintaining its position in second place overall with a healthy return of 13.2 per cent to date.

According to fund manager Séamus Magner, the fall last month was down to one name – IFG. The collapse of the takeover of the Irish financial services firm by Bregal Capital contributed a loss of 5 per cent to the fund.

Kleinwort Benson Investors slipped back in September, clocking up a loss of 6.2 per cent and pushing the investment management company into negative territory for the first time since the start of the race, leaving it in fourth position overall.

In its portfolio, Hong Kong jewellery stock Chow Sang Sang International was down by 31 per cent on the month as markets became concerned about the possibility of a hard landing scenario in the Chinese economy.

Similarly, Kenmare Resources fell 22 per cent on similar concerns about its exposure to Chinese demand.

On the positive side, the largest stock in the portfolio, Greencore, was up by 8 per cent during the month.