The Hawaii Employees’ Retirement System pension fund, coming off two negative fiscal years, swelled its assets by $945 million last quarter on the coattails of a robust stock market.

Following its worst-ever fiscal year loss of minus 18.7 percent, the state’s largest pension fund jumped 11.2 percent in the fiscal 2010 first quarter ended Sept. 30 and boosted its asset value to $9.8 billion, according to data released yesterday to the ERS board of trustees by its adviser, Portland, Ore.-based Pension Consulting Alliance Inc.http://media.ohio.com/images/20091110_money.jpg”; alt=”;”; />

“This was probably one of the best quarters we’ve seen in years,” ERS Chief Investment Officer Rod June said.

The pension fund has now grown more than $1.6 billion over its last two quarters dating back to the 9.3 percent return and $695 million gain it had in the last three months of fiscal 2009 that ended June 30 of this year.

“We’ve had a very strong third quarter (in the calendar year), and I think the board of trustees is very pleased with the way the portfolio has rebounded over one quarter,” June said. The portfolio’s 11.2 percent return last quarter beat its policy benchmark of

10.6 percent for the period, and for the last 12 months is up 0.3 percent compared with the policy benchmark of minus 0.8 percent. The portfolio’s quarterly return fell shy of the 11.5 percent median fund gain of public pension funds with $1 billion or greater in assets, but for 12 months is ahead of the median fund’s return of exactly 0 percent.

“All of us realize that the markets will continue to be volatile, but it seems we’re seeing an upward trend, at least in the public markets, so that should serve our fund well, both in equities and in fixed income,” June said.

Last quarter, the Standard & Poor’s 500 index posted a total return of 15.6 percent.

By asset class the ERS portfolio posted a 19.8 percent gain for its international equity, beating the policy benchmark gain of 19.7 percent; recorded a 16 percent increase for its domestic equity, just shy of the 16.3 percent policy benchmark; and earned a 5.9 percent return from its total fixed income investments, easily topping the benchmark of 4.1 percent.

In other areas the portfolio’s real estate investments — which lag by one quarter — rose 0.7 percent to better the benchmark of minus 5.2 percent; and alternative investments rose 0.9 percent. The pension fund, mandated by the state Legislature to target an 8 percent annual return, provides retirement, disability and survivor benefits to about 108,000 active and retired state employees.