Aug 25, 2017 (LBO) – Norway’s Government Pension Fund Global has returned a total 2.6 percent, or 202 billion kroner, in the second quarter of 2017, making the half-yearly performance the best in the fund’s history.
“The stock markets have performed particularly well so far this year, and the fund’s return in the two first quarters was 6.5 percent. This gives a total return of 499 billion kroner, which is the best half-year return measured in Norwegian kroner in the history of the fund,” says Trond Grande, Deputy Chief Executive Officer of Norges Bank Investment Management.
“We cannot expect such returns in the future. The record-high return is primarily due to the fact that the fund has become so large.”
Equity investments returned 3.4 percent, while fixed-income investments returned 1.1 percent. Investments in unlisted real estate returned 2.1 percent. The total return on investments was 0.3 percentage point higher than the return on the benchmark index.
Stocks in Asia and Oceania, which made up 22.0 percent of the fund’s equity investments, returned 3.9 percent. Japanese stocks returned 3.4 percent, or 6.4 percent in local currency, and amounted to 9.0 percent of equity investments.
Emerging markets accounted for 9.9 percent of the equity portfolio and returned 3.4 percent.
The Chinese stock market, home to 2.9 percent of the fund’s equity investments, returned 7.7 percent.
Analysts say Norges Bank has been investing in the Colombo Stock Exchange since at least 3Q2015, with GLAS, TJL and TKYO being among its initial investments.
As of June, Norges Bank was among the 20 largest shareholders in COMB, DIAL, HNB, HHL, MELS and SAMP.
In the second quarter, 16 billion kroner was withdrawn from the fund by the government. The krone appreciated against the main currencies during the quarter. This decreased the value of the fund by 32 billion kroner.
The fund had a market value of 8,020 billion kroner as at 30 June 2017, of which 65.1 percent was invested in equities, 32.4 percent in fixed income and 2.5 percent in unlisted real estate.