The Government Pension Fund Norway returned 5.5% in the second quarter of 2018, Folketrygdfondet, the sovereign wealth fund’s manager, announced.
Results were 0.6 percentage points higher than the benchmark in the period ended June 30, with the fund’s assets sitting at NOK250.5 billion ($29.5 billion).
Lars Tronsgaard, the institution’s CEO, said “a positive development in the stock market, driven by a high oil price” was the key driver for the returns.
The Government Pension Fund Norway’s equity portfolio earned 8.7% in the quarter, 0.8 percentage points above its benchmark. Fixed income also played a role in the quarter’s income, returning 0.6%, 0.3 percentage points higher than the benchmark.
In the first half of 2018, the equity and fixed income portfolios have returned 7.2% and 0%, respectively. They have performed 1 and 0.5 percentage points higher than the benchmarks, respectively.
The two portfolios have harvested an average 8.5% (equity) and 6.2% (fixed income) over the past 10 years. Equity has performed 1.2 percentage points higher than the benchmark, while fixed income has beaten it by 1 percentage point.
The Norwegian sovereign wealth fund’s asset mix was 53% public equity, 8.1% equity in other Nordic countries (specifically Denmark, 31.9% local bonds, and 6.6% in Nordic bonds).
The Government Pension Fund Norway compares itself with a benchmark index set by the Ministry of Finance, which has 60% stocks and 40% bonds, divided by 85% in Norway and 15% in the remaining Nordic countries, Finland, Denmark, and Sweden, according to Folketrygdfondet’s website. It is the sister fund to the country’s trillion-dollar Government Pension Fund Global, managed by Norges Bank.
Tags: Folketrygdfondet, Government Pension Fund Norway, Returns, Sovereign Wealth Fund