Volatile stock market pulls down results
The Government Pension Fund Global returned -4.9 percent, or -273 billion kroner, in the third quarter of 2015.
Equity investments returned -8.6 percent, while fixed-income investments returned 0.9 percent. The return on these investments was 0.2 percentage point lower than the return on the benchmark indices. Investments in real estate returned 3.0 percent.
"The negative return on equity investments was driven by the slowdown in the global economy and the decline in global equity markets, especially the Chinese market," says Yngve Slyngstad, CEO of Norges Bank Investment Management.
The absolute return of -273 billion kroner is the third weakest result in kroner since the fund's inception.
"We have to expect fluctuations in the value of the fund when there are large movements in the market," says Slyngstad. "With the fund as big as it is today, this can have a considerable impact in the short term. The fund has a long-term horizon, however, and is in a good position to ride out short-term market volatility."
The krone weakened against the main currencies during the quarter, which increased the fund's value by 382 billion kroner, and new capital of 12 billion kroner was transferred from the government.
The fund had a market value of 7,019 billion kroner on 30 September, of which 59.7 percent was invested in equities, 37.3 percent in fixed income and 3.0 percent in real estate.
Quarterly report 3Q 2015 (nbim.no)
Thomas Sevang, Head of Communications and External Relations
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