The National Pensions Reserve Fund Discretionary Portfolio (the fund excluding its investments in Irish Banks) today reported that it earned a return of 11.7% in the three months to end September 2009. Over the first nine months of the year, the fund earned a return of 16.4%. Since inception in 2001, the annualised performance of the fund is 2.2%.

The Natioanal Treasury Management Agency (NTMA) said in calculating the performance of the fund, a distinction is now drawn between the Discretionary Portfolio, the investment of which is the Commission’s responsibility, and the fund’s investments of €7 billion in Bank of Ireland and Allied Irish Banks plc (Directed Investments), which were made at the direction of the Minister for Finance. Directed Investments are held at cost and the dividend which is payable is not recognised until declaration by the bank concerned.

The Discretionary Portfolio’s third quarter performance was mainly due to its equity investments as global markets continued to climb from their March lows, boosted by encouraging economic data and better-than-expected corporate earnings. However, the NTMA said strength of the rally has left markets vulnerable to earnings disappointments and weakness in economic indicators.

The total fund secured a return of 7.5% during the third quarter of 2009. Over the first nine months of the year, it earned a return of 8.9%. Since inception, the annualised performance of the total Fund is 1.4%. At September 30, 2009 the fund’s value stood at €20.9 billion.