A more buoyant economy in New Zealand and Australia has helped the Dunedin City Council's Waipori fund claw back $3.5 million of its value, following hits the fund took during the recession.
Council finance and corporate support general manager Athol Stephens said "excellent" result for the first quarter of the financial year was a result of most of the fund's investments being in New Zealand and Australia.
"We make food and iron ore; people need those things," Mr Stephens said.
Those sort of exports had kept the economy going, whereas countries that made products like cars and televisions had struggled as consumers stopped spending on non-essential items, he said.
The $70.5 million fund was established in 1998 using the proceeds from the sale of the Waipori electricity generation scheme, and has been a valuable contributor to the council's finances.
The fund increased in value from $56 million, and stood at $72.6 million at the end of 2007, before shrinking to $66.9 million this year.
It has few United States investments, and only a couple of investments affected by economic problems there.
In New Zealand, the Waipori fund has investments in Auckland Airport and Contact Energy.
In Australia, it holds shares in BHP, Macquarie Infrastructure, Telstra and the Commonwealth Bank.
Mr Stephens said the result, included in a report prepared for the council's finance and strategy committee meeting on Monday, would probably have improved since September 30, when the first quarter ended.
In New Zealand, the markets had "roared away" recently, but he expected the improvement to be less dramatic in the second quarter.
"If things don't get worse, we'll have a decent sort of year," he said.
While the recession was affecting New Zealand less than other countries at the moment, it was another matter in the United States and the United Kingdom, where unemployment was up to 10%.
"It's a bit serious over there."
The fund's cash flow from dividends, interest and rents had contributed $897,900 for the quarter.
Fund chairman Ross Liddell said in the report maintaining its impetus would rely on the global growth outlook, and its impact on equity prices.
"Currently, there is an expectation that most countries are moving out of the recession towards positive growth.
"However, the impetus is finely balanced, and it may take some time before the impact of the recession is finally behind us," Mr Liddell said.
