IRELAND - The National Pension Reserve Fund (NPRF) has seen part of its portfolio post negative returns of 2.5% due to its holdings in Allied Irish Bank.

Announcing its third quarter results today, the fund highlighted strong growth on part of its discretionary portfolio which accounts for almost three-quarters of all assets.

However, €6.6bn, or 27%, of the fund's assets are invested in shares of the Allied Irish Bank and the Bank Of Ireland, leading to a return of -2.5 over the last three months to September.

The NPRF's discretionary portfolio performed better, posting year to date growth of 6%.

Funds increased by 3.6% in the third quarter due to strong equity markets, to which the reserve fund allocated almost €10bn of its total €24.5bn assets.

A further €2.5bn are allocated to alternative assets, with private equity and property both accounting for €800m, while €5.5bn were held in cash.

The current returns mean the fund has an annualised growth of 2% since its inception in 2001, with the average growth for the third quarter falling slightly below this at 1.9%.

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