OSLO: Norway’s sovereign-wealth fund, the world’s biggest, has a reported a near percentage-point decline in the value of its investments in the second quarter, pulled down by weak returns from bonds and US equities as well as the Norwegian krone’s appreciation against the dollar and other currencies.
Norges Bank Investment Management, the arm of the central bank that manages the fund, said on Wednesday that the value of its investments at June 30 were down by around 73 billion Norwegian kroner ($US8.81 billion) from three months earlier, equivalent to a fall of 0.9 per cent. The total value of the fund at end-June was 6.897 trillion kroner.
It was the fund’s first negative return since the second quarter of 2012.
Equity investments lost 0.2 per cent in value, fixed-income investments dropped 2.2 per cent in value, while real estate gained 2.0 per cent, NBIM said. North American shares produced weaker returns, European stocks were flat, and Asian stocks contributed positively, it said.
The return on fixed-income investments was affected by an increase in yields in the fund’s main markets,” NBIM Chief Executive Yngve Slyngstad said. “On the equity side, US stocks pulled down the result.”
The fund said a stronger krone against many major currencies decreased the fund’s value by 53 billion kroner in the quarter.
The management said the oil fund, also known as the Government Pension Fund Global, had increased its holdings in government bonds issued by Germany, China and Austria, and decreased its holding of those of Japan, France, and the UK.
The fund held 62.8 per cent in equities, 34.5 per cent in fixed-income assets and 2.7 per cent in real estate at the end of the quarter.
