NORWAY - The Government Pension Fund - Global (Oil Fund) has been buying a "considerable volume" of equities lately to take advantage of low valuations, Norges Bank deputy governor Jan Qvigstad has said.
He also said investors such as the Oil Fund would possibly earn more in the long term because of wide fluctuations in equity values. "Many investors have suffered losses on equities. As a result of this experience, required returns will be higher in the future," he added.
Qvigstad said 40% of the Oil Fund's equity holdings were purchased in 2008. The US$350bn fund currently holds over 1.25% of listed European equities. The largest equity holdings include multinationals companies such as Royal Dutch shell, Nestlè, BP, Exxon Mobil Corporation and Novartis.
The Oil fund has a 60/40 split between equities and fixed income.
In March, the Oil Fund said its end of year results for 2008 were the worst in its history, with a total loss of -23.3% (Globalpensions.com: 11/03/09). Weak returns on the equity portfolio of -40.7% led the overall loss. Fixed income investments lost 0.5%.
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.