The National Pensions Reserve Fund delivered a return of 14.9 per cent in the first nine months of the year after the scheme benefited from the strong rally in equity markets over the summer months.
Still, the gain was below the average 15.9 per cent increase seen in group pension funds managed by 10 companies including AIB Investment Managers and Eagle Star, according to Heissmann Consultants.
As of the end of September, the NPRF, which was created to provide partial funding for the Republic's pension costs from 2025, was worth €14.49 million, according to figures released yesterday. This makes the investment return so far this year €1.81 million.
The return for the third quarter alone was 6.5 per cent. "A combination of strong corporate earnings and a low inflation and interest rate environment provided a favourable context in which markets responded," said Michael Somers, chief executive of the National Treasury Management Agency, which manages the fund.
However, Dr Somers said markets had now entered a volatile phase in the face of continuing high energy prices and tightening Federal Reserve policy. The Irish market lost 4.3 per cent this week alone.
As of the end of September, the NPRF fund had €10.5 million, equal to 72.6 per cent of its total value, invested in large cap stocks.
As much as 77 per cent of the fund is invested in quoted stocks, while the remainder is made up of private equity, property, commodities, fixed income and some cash.
Dr Somers also said the diversification of the fund, as announced in February, was progressing. Last month, it started its emerging equities programme with an investment of €142 million, equal to 1 per cent of the fund's value.
