NORWAY - The Norwegian Government Pension Fund achieved a 1.5% return in the first quarter - however a stronger krone in relation to the investment currencies reduced the portfolio's market value by NOK 27.6bn.
Norges Bank achieved an excess return of 0.09% compared with the return on the benchmark portfolio defined by the Ministry of Finance.
The Fund’s market value was NOK 1, 876 billion at the end of the quarter and the Ministry of Finance transferred NOK 93.4 billion in new capital, which was the largest quarterly transfer in the fund’s history.
Norges Bank attributed the rise in international equity markets as making the largest contribution to the pension fund’s return.
The NOK1,891bn Government Pension Fund recently said it would increase its equity allocation from 40% to 60% and divest from certain holdings on ethical grounds.
Minister of Finance, Kristin Halvorsen said: “We now believe this represents an appropriate trade off between expected risk and return.”
The Government also recently announced its intention to invest in small caps.
This would increase the number of companies and could provide diversification to give the fund a broader exposure to the equities universe.
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