Strong performance from Norwegian Pension Fund

The Government Pension Fund Global, or National Oil Fund, recorded a record annual return for 2009 according to a new report by the Norwegian Central Bank.

A return of 25.6 percent was achieved by the fund, roughly equivalent to NOK 613 billion (USD 103 billion). This represents a 4.1 percentage point increase than benchmark portfolio return.

The Norway Post reports that analysts have determined that the Government Pension Fund Global has outperformed the market itself and that the massive losses seen during the worst of the global economic crisis in 2008 have begun to be recouped.

“Developments in 2009 must, in the same way as 2008, to a large extent be viewed in light of the financial crisis. The fund’s long-term management strategy ensured that we got through this period in a good way,” said CEO of Norges Bank Investment Management (NBIM), Yngve Slyngstad.

Compared with the Ministry of Finance-established benchmark portfolio, the National Oil Fund’s fixed income portfolio recorded an increase in 2009 of 7.4 percentage points, a significant turnaround from the -6.6 percentage point fall seen in 2008. The overall excess return for the fund of 4.1 percentage points was a marked improvement from the previous year’s figure of -3.4 percentage points.

“The values have come back much sooner than we could have expected. The parts of the fixed income markets that stopped working during the financial crisis gradually returned to more normal conditions. This contributed a lot to the strong excess return,” claimed Slyngstad.