The value of the National Pensions Reserve Fund (NPRF) grew by 6.9 per cent in the first six months of 2007 to €21.03 billion by the end of June.
According to the NPRF commission, the fund had a 4.9 per cent return between April and June. The fund was established to meet social welfare and pensions costs after 2025.
Dr Michael Somers, chief executive of the National Treasury Management Agency, which manages the fund, said: "Fund growth was driven by its global equity investments with bond markets falling due to investor concerns that short-term interest rate increases may still have some way to go.
"While equity markets have proven resilient thus far, they remain vulnerable to interest rate increases and rising oil prices."
In the last quarter the fund diversified into alternative assets committing a total of €96 million to three private equity investment vehicles and a total of €119 million to two property investment vehicles.
These commitments have brought the fund's total private equity commitment to €786 million and its total property commitment over the €1 billion mark to €1,064 million.