IRELAND – Ireland’s €12.3bn National Pensions Reserve Fund says it is avoiding the bond market and holding more than €1bn in cash while yields are at their current historic lows.
It said that a “significant” 10.6% - or €1.3bn - of its assets are currently in cash.
“This reflects the Commission’s decision not to invest further moneys in bonds while yields are at or near historical lows,” said National Pensions Reserve Fund Commission chairman Donal Geaney.
The fund, set up to provide partial funding of the nation’s pension costs from 2025, today reported a return of 2.4% for the three months to March 31.
It said: “Excluding the exchequer contribution of €330m, the Fund appreciated by €290m during the quarter.
Geaney said first quarter returns were driven by European equity investments. The performance of non-European equities was aided by a minor rally in the US dollar.
And he added the Commission was proceeding with the diversification of the fund’s asset classes – announced in February 2005 - with the aim of increasing its prospective return without substantially altering its overall risk profile.
It has increased its small-cap equity exposure to three percent and had agreed to commit some €125m to property investments.
Geaney added that the investment of cash committed to property funds would take place on a phased basis as fund managers identified suitable market opportunities.
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