Norway Fund Performed Modestly In 2008

Government Pension Fund Norway, Oslo, lost 25.1% on investments in 2008, reducing its total assets to 87.8 billion kroner ($12.2 billion) as of 31 December. But the fund outperformed its benchmarks by a collective 3.7 percentage points, adding 4.3 billion

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Government Pension Fund-Norway, Oslo, lost 25.1% on investments in 2008, reducing its total assets to 87.8 billion kroner ($12.2 billion) as of 31 December.

But the fund outperformed its benchmarks by a collective 3.7 percentage points, adding 4.3 billion kroner to the portfolio in 2008.

The fund lost 49.2% on Norwegian stocks but topped its benchmark, the OSEAX index, by 4.9 percentage points. Nordic stocks (Denmark, Finland and Sweden) returned -32.8% but bettered their custom benchmark by 4.7 percentage points.

The funds 8.5% return on Norwegian bonds edged ahead of its benchmark by 60 basis points, while Nordic bonds returned 23.5% but still trailed their benchmark by 110 bps.

Overall, were very satisfied with the excess return this year, says Lars Tronsgaard, deputy director of Folketrygdfondet, which manages domestic and Nordic assets for the fund. The absolute return was not satisfactory, of course.

According to Tronsgaard the fund rebalanced back into stocks last fall and is continuing to rebalance this year to the target 60/40 allocation.

L.D.

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