NORWAY - The Government Pension Fund Global returned -8.8% or -NOK284bn ($52bn) due to stumbling global stock markets, third quarter results show.
The overall return was the second weakest in the fund's history and fell short the benchmark by 0.3 percentage points.
Equity investments, as measured in international currency, returned -16.9% compared to -0.65% in the previous quarter and 9.82% for the third quarter in 2010. The plunge was apparent as investors reduced their risk appetite as concerns over the European sovereign debt crisis grew and global economic growth deteriorated, said the fund.
Fixed-income returned 3.65% for the quarter, while real estate was down 0.1%.
Yngve Slyngstad, chief executive officer of Norges Bank Investment Management (NBIM), which manages the fund said: "Europe's debt crisis and fears of a global economic slowdown weighed on stocks in the quarter. The fund placed most of its new capital into equities to exploit the declines and take advantage of its long-term perspective."
At the end of September 2011, the fund held 55.6% equities, 44.1% fixed income and 0.3% real estate.
The sovereign wealth fund received permission to invest in real estate early in 2010 and has slowly been building its exposure. In July, the fund made its second real estate investment when it bought a 50% stake in seven properties in and around Paris from AXA Group for €702.5m ($1.4bn)
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