The National Pensions Reserve Fund has reduced its exposure to equity markets over concerns about the continuing global debt crisis and its potential impact on share values.

The fund said it had reduced its listed equity exposure by €500 million, representing 10 per cent of its “discretionary portfolio” – the portion of its assets not yet tapped by the State.

The fund used the money to purchase financial instruments known as “put options”, which shield investors from adverse price movements in equity markets. It said the two-year options would protect €1.3 billion of the reserve fund’s quoted equities holdings of €1.7 billion, while still retaining the capacity to gain from any upward price movements. In its half-year update, the fund said its total size was €20.8 billion.