THE NATIONAL Pension Reserve Fund lost 11 per cent of its value in the first three months of the year because of slowing returns from stock markets.

The fund's value at the end of March was €19.4 billion, the Dublin-based National Pensions Reserve Fund said today in an e-mailed statement.

The fund has gained 4.5 per cent so far in April, the fund added.

Ireland's stock market as measured by the Iseq index fell 11 per cent during the first quarter, as a cooling property market hit shares of lenders and construction companies.

Gains in global stocks have been curtailed by the crisis affecting subprime mortgages in the US.

The negative return came "in what proved an extremely challenging quarter for investment management everywhere, as markets felt the impact of the subprime crisis in the US, the dislocation of international credit markets and lower economic growth," according to the statement.

Countries including Ireland have established funds to finance future pension payments and help reduce the burden on state coffers as life expectancy increases. The Government invests 1 per cent of GNP in the fund each year.

No disbursements will be made before 2025. - (Bloomberg)