Norway SWF return boosted by equity rally

Norwegian villageThe Norwegian Sovereign Wealth Fund experienced its lowest year of returns last year since 2011 – though still managed to deliver a positive result of 2.68% due to an equity rally in the final quarter.

Collapsing oil prices, emerging markets and negative interest rates weighed heavily on the performance of the fund, which is managed by Norges Bank Investment Management.

Emerging markets reduced the fund’s value by 7%, according to figures from the fund. Brazilian holdings alone fell by 38.2%.

In 2014 the fund returned 7.6%, while in 2012 and 2013 it saw double-digit growth rates.

The positive return last year was down to real estate, equity and fixed-income investments. These asset classes returned 10%, 3.8% and 0.3% respectively.

The krone’s weakening against most major currencies over the year also increased the fund’s value, by 668 billion kroner (€71.5 billion). The Norwegian government invested an additional 42 billion kroner into the fund.

Overall, the fund had a market value of 7,475 billion kroner, or €800 billion, on December 31, 2015, of which 61.2% was invested in equities, 35.7% in fixed income and 3.1% in real estate.

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