Norway’s Pension Fund Rakes in Record $180 Billion Return for 2019

Norges Bank Investment Management also deliberates eight candidates for CEO job.

Norway’s Government Pension Fund Global returned 19.9% in 2019, or 1,692 billion kroner ($180 billion), the highest annual return in kroner in the fund’s history. The strong performance was a sharp turnaround from 2018, when the fund lost 6.1%, and raised its total asset value to 10.09 trillion, or approximately $1.07 trillion. 

“2019 has been a great year in the fund’s history, driven by positive equity returns in all of the fund’s principal markets and in all equity sectors,” Norges Bank Investment Management CEO Yngve Slyngstad said in a statement.

Equity investments were the top performing asset class for the fund, returning 26% for the year, while fixed income investments returned 7.8% and unlisted real estate investments returned 6.8%. The fund’s total return outpaced its benchmark index by 0.23 percentage points. The asset allocation of the fund as of the end of 2019 was 70.8% in equity, 26.5% in fixed income, and 2.7% in unlisted real estate.

The fund was invested in 9,202 companies at the end of 2019, up from 9,158 a year earlier. The fund’s average holding in the world’s listed companies, measured as its share of the FTSE Global All Cap stock index, was 1.5% at the end of the year. The fund had holdings of more than 2% in 1,469 companies, and holdings of more than 5% in 39 companies.

Its investments spanned 74 countries and 50 currencies, with 43.9% of the fund invested in North America, up from 43% a year earlier, while 33.7% was invested in Europe, down from 34.1% in 2018, and 19.2% in Asia-Pacific, down from 19.3% the previous year. Emerging markets accounted for 10.1% of the fund’s investments, down from 10.3% the prior year.

The fund’s fixed income investments consisted of 4,608 securities from 1,177 issuers, down from 4,811 securities from 1,254 issuers in 2018. The investments were spread across 26 currencies at the end of the year, unchanged from a year earlier.

Since being established by Norges Bank Investment Management at the start of 1998, the fund has generated an annualized return of 6.1%, or 4.2% after management costs and inflation. Over the last 10 years, the fund’s annualized return is 7.8%, which after management costs and inflation is 6%.

The fund is currently looking for a replacement for Slyngstad, who announced in October that he would step down once a successor was hired.  The deadline for applying for the post was February 21, and eight candidates—including current Deputy Chief Executive Trond Grande—are gunning for the job to run the sovereign wealth fund, Norges Bank Investment Management said Tuesday.

In addition to Grande, Yngvar Willy Andersen, Olav Bø, Thorbjorn Gaarder, Anders Halberg, Pål Renli, and Jake Tai are among those who applied. One applicant who requested to be excluded from public disclosure remained unnamed.

Related Stories:

Norges Bank CEO to Resign, Pension Fund Returns 1.6% in Q3 

Equities Killed Norway’s Sovereign Wealth Fund in 2018 

Norway’s Finance Ministry: Keep Sovereign Wealth Fund with Central Bank

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