OSLO: Norway’s sovereign-wealth fund, the world’s biggest by assets, reported a near five percentage-point decline in the value of its investments in the third quarter, pulled down by negative returns from its equity investments amid weaker global markets.
Norges Bank Investment Management, the arm of the central bank that manages the fund, said Wednesday that the decline totaled 273 billion Norwegian kroner ($32.17 billion), leaving the fund’s total value at NOK7.019 trillion at Sept. 30.
Equity investments lost 8.6% in value in the third quarter compared with the end of the previous quarter while fixed-income investments gained 0.9%. The fund’s real estate portfolio gained 3.0%, NBIM said. Equity returns were weak in all regions, but the weakest returns were in Asian stocks, notably Japan and China, it said.
“The negative return on equity investments was driven by the slowdown in the global economy and the decline in global equity markets, especially the Chinese markets,” said NBIM Chief Executive Yngve Slyngstad.
The companies that made the most negative contributions to the fund’s performance were German car makers Daimler AG and Volkswagen AG, and mining company Glencore PLC, NBIM said. Volkswagen is embroiled in an emissions-testing scandal which has cast a shadow over Germany’s auto industry while falling commodity prices have battered Glencore’s performance.
The fund said a weaker krone against many of the main currencies had boosted the fund’s value by NOK382 billion 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 the U.S., Japan and Germany, and decreased its holdings of those of Brazil, Finland and the U.K. The fund held 59.7% in equities, 37.3% in fixed-income assets and 3.0% in real estate at the end of the quarter.
