Pensions fund has 0.5% overall decline

The National Pensions Reserve Fund has secured a return of 1.3 per cent for the first six months of the year and at the end of June had a value of €19.6 billion.

The fund was established in 2001 with the objective of contributing to the cost of meeting public service and social welfare provisions from 2025 onwards.

In a quarterly update on its performance – published on the same day as its annual report – the fund said it had secured a return on investment of 9.4 per cent for the second quarter of the year.

Its investments include €7 billion which was provided to recapitalise AIB and Bank of Ireland.

Last year the fund had an investment return of -30.4 per cent to €16.1 billion as world stock markets and the values of other assets collapsed.

Since its inception the fund had suffered an overall fall of 0.5 per cent to the end of 2008.

Of the remainder, €8.7 billion is invested in large cap equities, €579 million in small cap equities and €476 million in private equities.

It also has €1,13 billion invested in bonds and €468 million in a property portfolio.

The chief executive of the National Treasury Management Agency, which oversees the fund, Dr Michael Somers said it had preserved the State’s capital investment and that this was a very good return in the context of the global economic crisis.

Minister for Finance Brian Lenihan said while 2008 was a disappointing year for the fund it was important to note it did not have to generate funds for the Exchequer until 2025.