Norway’s sovereign wealth fund has increased by half a trillion kroner in the latest quarter because of a weaker domestic currency and inflows from oil revenue – even though the fund’s investments shed 4.4% of their value in the bear market, interim results show.

Norges Bank Investment Management, (NBIM), which runs the Government Pension Fund Global (GPFG), announced this morning that the fund had made a 4.4% investment loss in the third quarter of this year, equivalent to NOK449bn (€43.7bn).

The latest quarterly loss brings the SWF’s total loss for the first nine months of this year to 18.2%, measured in the fund’s currency basket, an NBIM spokeswoman told IPE.

But overall, the GFPG’s market value rose by NOK559bn during the three months to NOK12.216tn, the central bank arm said in its statement on Q3 results.

The gain, despite the negative investment return, was due to NOK306bn of net inflows from the government – effectively revenue from Norway’s petroleum activities – and NOK702bn from currency movements.

Inflows to the fund have increased quarter by quarter over the last 12 months – a period of soaring energy prices worldwide.

NBIM said the Norwegian krone had depreciated somewhat against several major currencies in course of the quarter.

Since the internationally-invested SWF’s value is denominated in a basket of non-Norwegian currencies, it can rise and fall in krone terms depending on foreign exchange markets.

Trond Grande, NBIM’s deputy chief executive officer, said: “The third quarter has been characterised by rising interest rates, high inflation, and war in Europe,” adding that this had also affected the markets.

“The return was negative for equities, fixed income, and unlisted real estate,” he said.

Returns were in fact negative for all four of the asset classes in the GPFG between July and September, with equities losing 4.8%, fixed income investments hit with a minus 3.9% return, unlisted real estate posting a 1.1% loss and unlisted renewable energy infrastructure – the fund’s newest and smallest asset class – posting a 3.7% loss, according to the figures released.

However, the report also showed that NBIM outperformed its benchmark index by 0.14 percentage points in the quarter.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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