IRELAND - The National Pension Reserve Fund (NPRF) has seen assets under management fall a further €2.5bn between the first and second quarters, following losses of more than 9% from its holdings in two Irish banks.
The losses come just days after the scheme announced 2010 results that had seen it write down its holdings in Allied Irish Bank and Bank of Ireland by 25.7%.
Between the end of March and the end of June, its directed portfolio - comprising holdings in the two credit institutions and €10bn in cash holdings intended as Ireland's contribution to the IMF/EU bailout package - lost 9.1%.
Results for the year to date saw returns fall as low as -25.1%.
In a statement, the scheme blamed the second-quarter losses on "movements in the ordinary share prices" of both banks.
Returns for its discretionary portfolio, accounting for around a quarter of all assets and still controlled by the NPRF Committee, were an improvement on the above returns with a 0.7% loss.
The fund said global equity returns were "slightly down" in euro terms in the three months to 30 June, resulting in a 0.7% loss for its discretionary portfolio.
As a result of the weakened stock markets, the NPRF Committee decided in June to decrease its exposure to listed equity by €500m, using the funds to acquire equity index put options to counteract any further adverse market movements.
It said: "These options are for a two-year period and protect against adverse equity price movements on €1.3bn of the fund's quoted equities holdings of €1.7bn, while still retaining the capacity to gain from any upward price movements on the entire €1.7bn."
At the end of July, the NPRF had €20.8bn in assets under management, down from €23.2bn at the end of March.