Pension fund increased by NOK 28 billion in 2017
The Norwegian Pension Fund (Folketrygdfondet) achieved a record profit of NOK 28 billion last year. The return was 13.5 percent, which is 0.5 percentage point higher than the market.
In total, the capital of the Governmental Pension Fund Norway increased to NOK 240 billion in the course of last year.
– We are very pleased with the result for 2017, both overall and for both shares and interest revenues individually, says Managing Director of the Pension Fund, Lars Tronsgaard.
The return on the equity portfolio was 19.3 per cent, while the return on the fixed income portfolio was 3.6 per cent. While the equity portfolio beat the market by 0.2 percentage points, the yield portfolio provided 0.8 percentage points better than the overall marked.
In the last ten years, the average annual return is 7.5 per cent, providing an excess return of 0.9 percentage points on average a year.
More difficult times ahead
– As a long-term and counter-cyclical investor, we have achieved higher returns over time than the market. After many years of good returns, we must however be prepared for more challenging times ahead, Lars Tronsgaard says.
This week it became clear that the Norwegian Pension Fund Abroad – aka the oil fund – achieved a return of 13.7 per cent, or NOK 1.028 billion in 2017. That is twice as much as the year before. Since the oil fund was created in 1996, the total return has been NOK 4,151 billion.
While the Government Pension Fund Norway is managed by the Norwegian Pension Fund, the oil fund is managed by Bank of Norway.
The Norwegian Pension Fund takes its investment decisions on an independent basis within the framework defined by the Ministry of Finance. It is a “closed fund”, which means that no new funds are added, but that the return is added to the fund. The mandate states that the administration of the fund shall have the highest possible return as a objective.
© NTB Scanpix / #Norway Today