Figures released by the National Pensions Reserve Fund show that it gained 9.4% in the second quarter of this year, and is 1.3% ahead for the first six months of the year. The performance was helped by the rally in global stock markets in recent months and follows a drop of 30% last year.
The fund is now using two separate categories to calculate its figures, as it invested €7 billion in AIB and Bank of Ireland earlier this year. The fund is currently holding the bank shares at cost price, though the banks will be paying a dividend. The bank investments account for 36% of the fund's total assets of €19.4 billion.
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The rest of the NPRF portfolio, known as the discretionary portfolio, made a return of 12.2% in the second quarter and 4.2% over the first six months.
The NPRF said €4 billion of the investment in the banks came from its own resources - mainly cash and bond sales - with €3 billion from Exchequer contributions from 2009 and 2010.
The fund is due to conduct a review of its long-term investment strategy this year. The NPRF, in which the Government invests 1% of total economic output each year, was set up to help meet social welfare and pensions costs from 2025 onwards. The recent An Bord Snip Nua report earlier this month said the annual Exchequer payment should be suspended.
