As the largest sovereign wealth fund worldwide, Norway’s Government Pension Fund boasts a strong portfolio across various sectors of the global financial market.
Norway’s government pension fund Global, created in the 1990s to manage surplus revenues from the country’s thriving oil and gas sector, faced significant headwinds in fiscal revenues for the third quarter ending September 2023.
in one Announcement On Tuesday, Norges Bank Investment Management said the fund, which represents the largest sovereign wealth fund worldwide, experienced a significant loss of 2.1% in revenue during the recently ended quarter.
All asset classes owned by the fund took a hit, resulting in a loss of 374 billion Norwegian kroner (equivalent to $34 billion) during the last three months, despite a positive trend seen in the first half of the year.
Norges Bank CEO blames poor market sentiment for returns
Despite the downturn, the fund slightly outperformed its benchmark index and achieved returns 0.17 percentage points above the index, equivalent to 27 billion kronor.
However, it’s important to note that the third-quarter results reflect the fund’s first quarterly loss in the last year, despite a relatively resilient performance.
The poor performance signals ongoing turmoil in global financial markets as many industries face financial distress.
Trond Grande, deputy chief executive of Norges Bank Investment Management, said the technology, industrial and consumer discretionary sectors contributed to the negative returns. According to him, the overall weak stock market was a major reason for the decline in the quarter.
“The stock market witnessed a weak quarter compared to the last two quarters. It was particularly the tech, industrials and consumer discretionary sectors that contributed negatively to returns”, Grande said.
Diversified portfolio across 70 countries
As the largest sovereign wealth fund worldwide, Norway’s Government Pension Fund boasts a strong portfolio across various sectors of the global financial market.
With a diversified portfolio, the fund has invested in more than 9,200 companies in 70 countries. Specifically, Government Pension Fund Global saw a 3.3% loss in non-listed real estate and a 2.4% loss in renewable energy infrastructure investments during the third quarter.
According to the report, equities accounted for 70.6% of the fund’s investments as of the end of the third quarter, slightly lower than the previous quarter, reflecting the fund’s diversified portfolio strategy.
As of 30 September 2023, the total value of the fund was 14,801 billion kroner. Equity had the lion’s share of investments at 70.6%, followed by fixed income at 27.1%, and small allocations of 2.2% to unlisted real estate and 0.1% to unlisted renewable energy infrastructure.
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Chimamanda is a crypto enthusiast and experienced writer who focuses on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed her interest in emerging economies. She combines her passion for blockchain technology with her love for travel and food, bringing a new and fascinating perspective to her work.
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