Norges Bank Investment Management (NBIM) was able to use the scope it has for active management between July and September to curb investment losses for the largely-index sovereign wealth fund it runs, the central bank arm’s latest results show.
In its third quarter report published this morning, NBIM revealed the Government Pension Fund Global (GPFG) made a return in the three-month phase of -2.1%, equivalent to losses worth NOK374bn (€31.7bn).
However, NBIM said: “The fund’s return was 0.17 percentage point better than the return on the benchmark index, equivalent to NOK27bn.”
Trond Grande, deputy chief executive officer of the Oslo-based institution, said: “The stock market saw a weaker quarter compared to the two previous quarters.
“It was particularly the tech, industrials and consumer discretionary sectors which contributed negatively to the return,” he said.
The Q3 loss – the fund’s first quarterly loss since the corresponding quarter in 2022 – was the consequence of losses clocked by all four of the GPFG’s asset classes, with equities, making up 70.6% of the fund, in themselves having lost 2.1% in the period.
Fixed income lost 2.2%, while real estate and unlisted renewable energy infrastructure registered losses of 3.3% and 2.4%, respectively.
With the Q3 loss coming after a first-half investment gain of 10%, the GPFG’s year-to-date return is still in positive territory.
The value of the giant fund dropped to NOK14.80trn by the end of September from NOK15.30bn at June’s close, with a falling Norwegian krone in the period having further dented the fund’s value by NOK264bn – though NOK139bn of national petroleum revenue had flowed into the fund, according to the quarterly report.
Since the end of September, the fund’s value has regained some ground, and amounts to NOK15.10bn today, according to the rolling total displayed on NBIM’s home page.
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