The value of assets within the National Pensions Reserve Fund (NPRF) grew by 4.9 per cent in the second quarter on 2007.

This brought growth for the first six months of the year to 6.9 per cent, leaving the fund with a value of €21.032 billion.

The National Treasury Management Agency (NTMA), which manages the fund, said its expansion had been driven by global equity investments.

This came as bond yields fell due to investor concerns that short-term interest rate increases may still have "some way to go", said NTMA chief executive Dr Michael Somers.

He went on to warn that, while equity markets had proven resilient thus far, "they remain vulnerable to interest rate increases and rising oil prices".

Declines in bond markets prompted the NPRF to fulfil its planned bond allocation over the quarter.

Having previously been underweight in the class, it committed €1.039 billion to the bond markets, bringing its total fixed-income weighting to 16.4 per cent.

The fund also pushed ahead with a move into alternative assets, investing €96 million in three private equity investment vehicles and €119 million in two property vehicles.

This brings the fund's total private equity commitment to €786 million and its property investments to €1.064 billion.

Irish property does not feature in the portfolio, which has focused to date on Britain, the US and Asia.

Within its private equity holdings, the fund invests in US venture capital and is about to extend this to Irish venture capital.

It plans to invest €60 million in Irish venture capital initiatives this year, having already committed a portion of this to a new fund from Delta Partners that will focus on technology firms.

The NPRF wants to put €2 billion into private equity by 2009.