Norges Bank Investment Management: Equities continue to advance and NBIM outperforms the benchmark
The return on the Government Pension Fund – Global was 1.5 per cent in the first quarter. The rise in international equity markets made the largest contribution to the return. Norges Bank achieved an excess return of 0.09 percentage point compared with the return on the benchmark portfolio defined by the Ministry of Finance.
The Fund’s market value was NOK 1 876 billion at the end of the quarter. The Ministry of Finance transferred NOK 93.4 billion in new capital, which is the largest quarterly transfer in the Fund’s history. The return on investments was NOK 26.7 billion, while a stronger krone in relation to the investment currencies reduced the market value by NOK 27.6 billion. However, the change in the krone exchange rate has no effect on the Fund’s international purchasing power.
The first quarter return on Norges Bank’s foreign exchange reserves was 1.4 per cent, while the return on the Government Petroleum Insurance Fund was 0.8 per cent in the first quarter. This fund is invested only in fixed income instruments.
The capital in the portfolios managed by Norges Bank Investment Management (NBIM) totalled NOK 2 119bn. The long-term portion of the foreign exchange reserves accounted for NOK 224 billion of this amount and the Petroleum Insurance Fund for NOK 15 billion.
International equity markets continued to advance in the first quarter, particularly in Europe, the US and emerging markets. The return on the international equity portfolios managed by Norges Bank was 2.6 per cent. Yields fell in key markets. This resulted in somewhat higher bond prices, so that the return on the fixed income portfolios was 0.7 per cent.
NBIM has engaged Paul Golding to head NBIM’s project to prepare for investment in international real estate markets. The Ministry of Finance will take a decision on investment in real estate at a later date. Mr Golding has extensive experience in the real estate markets, including as head of Merrill Lynch’s real estate investment banking business in Europe and the Middle East.
Trond Grande has been appointed Chief Risk Officer in NBIM. He leaves the position of head of risk management with Storebrand Livsforsikring AS.
Henrik Syse has been employed since 2005 to build up the Corporate Governance Department. As planned, Henrik will return to his work as researcher at the International Peace Research Institute, Oslo, over the next six months. The position of head of Corporate Governance will now be advertised.
The quarterly report is published on www.nbim.no.
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