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Pension Fund
recaps losses
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Oslo, March
8, 2010 –The Norwegian Central Bank reports a record annual
return for the Government Pension Fund Global in 2009. The
fund returned 25.6 percent, equivalent to 613 billion
kroner. This was 4.1 percentage points higher than the
return on the benchmark portfolio. According to analysts,
this means that the Fund, also known as the National Oil
Fund, has done better than the market as a whole,and has
recovered most of the losses suffered during 2008, the worst
year of the global financial crisis.
“Developments in
2009 must, in the same way as 2008, to a large extent be
viewed in light of the financial crisis. The fund’s
long-term management strategy ensured that we got through
this period in a good way,” says Yngve Slyngstad, CEO of
Norges Bank Investment Management (NBIM).
Compared with
the benchmark portfolio set up by the Ministry of Finance,
the fund’s fixed income portfolio had an excess return of
7.4 percentage points in 2009, against -6.6 percentage
points in 2008. The fund as a whole had an excess return of
4.1 percentage points, compared with -3.4 percentage points
the previous year.
“The values have
come back much sooner than we could have expected. The parts
of the fixed income markets that stopped working during the
financial crisis gradually returned to more normal
conditions. This contributed a lot to the strong excess
return,” says Slyngstad.
The fund’s
market value was 2 640 billion kroner at the end of 2009, up
from 2 275 billion kroner a year earlier. Capital inflows
of 169 billion kroner were the lowest since 2004 and less
than half of the record amount in 2008. At the same time, a
stronger krone reduced the market value by 418 billion
kroner. Fluctuations in the krone have no effect on the
fund’s international purchasing power.
Since 1998 the
fund has had an annualised gross return of 4.7 percent in
international currency. The annual net real return in the
same period has been 2.7 percent, up from 1 percent a year
earlier. The fund has had an annual excess return of 0.25
percentage points since 1998.
(NRK/Press release)+Norway Post
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