Norway’s Pension Fund Global Rebounds in 2023, Still Misses Benchmark

Rallying equities helped the pension giant return 16.1% during the year, but it fell 18 basis points shy of its benchmark.



In a sharp turnaround from 2022’s 14.1% loss, Norway’s Government Pension Fund Global returned 16.1% in 2023, more than 2.22 trillion kroner ($212.7 billion), to raise its total asset value to nearly 15.77 trillion kroner (more than $1.5 trillion). It was the pension giant’s largest annual return in terms of kroner, but despite the robust returns, the portfolio underperformed its benchmark by 18 basis points.

The performance was buoyed by the pension giant’s equity investments, which gained 21.3% during the year and account for 70.9% of the investment portfolio’s total asset allocation. Fixed-income investments, the pension fund’s second-largest allocation at 27.1%, returned 6.1%, while unlisted renewable energy infrastructure, which makes up 0.1% of the portfolio, returned 3.7%.

The pension fund’s unlisted real estate assets were a drag on the portfolio, losing 12.4% for the year. However, at just 1.9% of the total asset allocation, the losses did not make too much of a dent in the returns.

“Despite high inflation and geopolitical turmoil, the equity market in 2023 was very strong, compared to a weak year in 2022,” Norges Bank Investment Management CEO Nicolai Tangen said in a release. “Technology stocks in particular performed very well.”

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According to Norges Bank, which manages the pension fund, the tech sector was the biggest contributor to the year’s investment returns by sector, returning 895 billion kroner. Consumer discretionary investments returned 361 billion kroner, followed by financials and industrials, which contributed 316 billion kroner and 310 billion kroner, respectively.

Health care investments returned 104 billion kroner, real estate investments 87 billion kroner, basic materials 58 billion kroner, telecommunications 45 billion kroner, energy 40 billion kroner, consumer staples 28 billion kroner, and utilities 23 billion kroner.

In terms of individual holdings, Microsoft was the top contributor to the pension fund’s absolute return, adding 129 billion kroner, followed by Apple and Nvidia Corp. at 114 billion kroner and 98 billion kroner, respectively. Meta Platforms and Amazon contributed 78 billion kroner and 74 billion kroner, respectively, while Alphabet added 72 billion. Tesla and Novo Nordisk contributed 36 billion kroner and 34 billion kroner, respectively, while Broadcom and ASML added 27 billion kroner and 25 billion kroner, respectively.

According to Norges, with the krone depreciating against several of the main currencies during the year, currency movements added 409 billion kroner to the fund’s value, while inflows to the fund totaled 711 billion kroner.

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