Irish pension funds experienced steady growth of 12.4 per cent during 2004, reflecting a generally positive market environment, a survey by the Irish Association of Pension Funds (IAPF) has revealed.

The survey, compiled from the results of a questionnaire sent to financial institutions involved in pension fund asset management, shows that €62.3 billion in assets were under management at the end of 2004, compared with €55.5 billion at the end of 2003.

Among the other main findings of the IAPF's asset allocation survey are the continuation of a recent trend in funds moving to passive management. By year end, the proportion of assets under passive management rose to 25.8 per cent, compared with 17.9 per cent at the end of 2003.

Over the year, property content was trimmed back from 8.7 per cent to 7.4 per cent. Cash and other short-term instruments increased from 3.8 per cent to 4.7 per cent at year end. During 2004, equities outperformed bonds by some 3 per cent. The equity content of portfolios was broadly unchanged over the year.

By year end, equities accounted for 63.1 per cent of assets under management, compared with 63 per cent at the end of 2003.

The Irish equity content experienced a small change, increasing by 0.2 per cent to 12.2 per cent at the end of 2004. The euro zone region weighting was unchanged at 17.5 per cent at the end of 2004.

Exposure to the UK, US and the rest of Europe also remained largely unchanged over the year, although Japanese equity holdings increase by 0.6 per cent to 3.6 per cent, with a corresponding 0.4 per cent reduction in Pacific Basin holdings.