Following a robust 10% return for the first half of the year, Norway’s $1.32 trillion Government Pension Fund Global’s investment portfolio lost 2.1% during the third quarter, which translates to 374 billion kroner ($33.6 billion). Despite the loss, the pension fund outperformed its benchmark index by 17 basis points.
Combined with a 264 billion kroner loss from currency movements and offset by 139 billion kroner of net inflows from the government, the pension giant lost approximately 499 billion kroner ($44.7 billion) in market value during the quarter to decline to approximately 14.8 trillion kroner as of September 30, from
However, according to the website of GPFG manager Norges Bank Investment Management, the pension fund’s market value has since rebounded to more than 15.2 trillion kroner, as of October 24.
The pension fund reported annualized returns of 6.39% over the last 10 years, 5.84% since its inception in 1998, as of the end of September.
After returning 13.7% during the first half of 2023, the pension fund’s equity investments declined 2.1% during the third quarter, while its fixed-income investments lost 2.2% after returning 2.3% during the first two quarters. The portfolio’s unlisted real estate investments lost 3.3% during the quarter, adding to a 4.57% loss during the first half, and its unlisted renewable energy infrastructure investments declined 2.4%, adding to a loss of 6.5% during the first two quarters.
“The stock market saw a weaker quarter compared to the two previous quarters,” Trond Grande, deputy CEO of Norges Bank Investment Management, said in a statement. “It was particularly the tech, industrials and consumer discretionary sectors which contributed negatively to the return.”
According to Norges Bank, the loss from currency movements was a result of the krone strengthening against several main currencies during the quarter.
As of September 30, the pension fund had an asset allocation of 70.6% equities, 27.1% fixed income, 2.2% unlisted real estate and 0.1% unlisted renewable energy infrastructure.
In other news, NBIM’s executive board decided earlier this month to remove South Korean logistics company Hyundai Glovis from its observation list. The company had been under observation since 2022 for sending decommissioned vessels to be broken up for scrap in Pakistan and Bangladesh, where NBIM stated the working conditions are extremely poor. According to NBIM, Hyundai Glovis has since established a new policy for responsibly disposing decommissioned vessels.
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Tags: Government Pension Fund Global, Norges Bank Investment Management, Norway, Q3 2023, Sovereign Wealth Fund, third quarter of 2023, Trond Grande