Return of 59 billion kroner
The Government Pension Fund Global returned 2.1 percent, or 59 billion kroner, in the first quarter of 2011 as stock market gains in Europe and the US offset a drop in Asian share prices.
“Better-than-expected earnings at a number of companies, higher oil and gas prices and growth expectations for the global economy helped push European and US share prices higher,” says Yngve Slyngstad, chief executive officer of Norges Bank Investment Management (NBIM), which manages the fund.
The fund’s equity holdings returned 2.9 percent in the first quarter of 2011, measured in international currency, while fixed-income investments returned 0.7 percent. The overall return was 0.3 percentage point higher than the return on the fund’s benchmark indices.
The fund’s best-performing stock sector was oil and gas, followed by the telecommunications and industrial sectors. The biggest-gaining stock investment, measured in krone returns, was in US oil producer Exxon Mobil, followed by natural gas producers BG Group and Gazprom. The weakest performers were Tokyo Electric Power Co. (Tepco), Novartis, a Swiss drugmaker, and Nestlé.
Asian stock markets fell after Japan on 11 March was hit by its worst earthquake on record. About 5 percent of the fund's equity investments were in Japan at the end of the first quarter and returned -2.8 percent, measured in local currency. Approximately 4 percent of the fund’s fixed-income investments were in yen. These returned 0.2 percent, measured in local currency.
The fund was invested in 8,697 listed companies and 8,703 fixed-income securities from 1,603 issuers at the end of the first quarter. Equities accounted for 61.3 percent of the fund’s investments, while fixed-income securities and real estate made up 38.6 percent and 0.1 percent, respectively.
The market value of the fund rose 24 billion kroner to 3,102 billion kroner in the first quarter. The fund returned 59 billion kroner in the quarter and received 38 billion kroner in capital inflows from the government. At the same time, a stronger krone against several of the currencies the fund invests in reduced the market value by 73 billion kroner.
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