NORWAY - The NOK942.4bn (e114bn) Norges Bank petroleum fund has returned 1.4% in the third quarter of 2004, boosted by strong performance in the fixed income portfolio.
Fixed income returned 3.1% in the third quarter while the equity portfolio posted a return of negative 1%. The fund posted an overall return of 4.2% for the first three quarters of the year.
The 1.4% return on the fund’s ordinary portfolio was 0.02% lower than the return on the benchmark portfolio set by the Ministry of Finance, Norges Bank said in a statement.
Norges Bank Investment Management executive director Knut N. Kjaer (pictured) said the negative performance in the equity portfolio was due to negative performance of Japanese equities and the falling of European and American equities during the quarter.
Based on fourth quarter performance to date, the outlook for the final quarter of 2004 was positive, he added.
“We have still one month and one week to go, but so far in the fourth quarter, it’s a strong equity market and still a positive return in the fixed income market,” Kjaer said.
“So, so far the fourth quarter is a better than normal quarter.”
The return on the environmental fund in the third quarter was negative 1.6%, equating to a return of 4% for the first three quarters of 2004.
Measured in NOK, the return on the fund’s ordinary portfolio at the third quarter mark was 4.7%, the bank said.
“The higher return in NOK is due to a depreciation of the krone against the currencies in the benchmark portfolio during the period,” Norges Bank said in a release.
“This has no effect, however, on developments in the fund’s international purchasing power.”
The market value of the petroleum fund’s combined securities portfolio was NOK988.1bn at the end of the third quarter, representing an increase of NOK46bn during the quarter and an increase of NOK143bn since the beginning of the year.
The bank attributed the increase across the year partly to the NOK103bn transfer of new capital, partly to the NOK39bn return in capital markets and partly to the NOK1bn depreciation of the krone.
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