Norges Bank Investment Management, which runs Norway’s 8.3 trillion krone ($988.2 billion) sovereign wealth fund (the world’s largest), reported 1.8% returns for the fund’s second quarter Tuesday morning.
Norges Bank, which runs the Government Pension Fund Global’s equities, returned 2.7% in the period ended June 30, reversing a first quarter downturn. Unlisted real estate investments gained 1.9%. Fixed income was flat. Earnings were 0.2 percentage points under the benchmark. Last year, the fund returned 2.6% for the second quarter.
“North American and European stocks had a positive development in the quarter despite the prospect of increased trade barriers,” said Trond Grande, Norges Bank’s deputy CEO, who noted that the period’s $19.8 billion boost gave the fund its first inflow since 2015 due to a strong recovery from oil prices. For example, ICE Brent crude futures were trading at roughly $28 per barrel at the end of 2015. At the end of June 2018, it hit a $79 high.
During this time, the Norwegian krone depreciated against the dollar, which increased the fund’s value by $5.5 billion despite losing some worth when converted to USD (it was previously appraised at $1 trillion).
In addition, 2 billion krone was withdrawn from the fund.
As a whole, however, the bank still suffered a quarterly outflow.
As of June 30, the Government Pension Fund Global had allocated 66.8% to equities, 2.6% in unlisted real estate, and 30.6% in fixed income.