Oslo, 23 February 2021
Government Pension Fund Norway
The Government Pension Fund Norway (GPFN) achieved a return of 8.8% in 2020 – 0.9 percentage points ahead of its benchmark.
“Our active investment strategy outperformed the market in 2020, as we managed to take advantage of market turmoil,” says Folketrygdfondet CEO Kjetil Houg.
The return on non-Norwegian Nordic equities was higher than the return on Norwegian equities in 2020, a stable trend over the past 10 years.
“Managing a Pan-Nordic portfolio has improved our returns and risk profile in recent years,” says Kjetil Houg.
The return on the equities portfolio totalled 8.0%, 0.2 percentage points lower than the equities benchmark index. The fixed-income portfolio returned 7.4%, which is 2.5 percentage points above its benchmark, the highest excess return ever recorded for the fixed-income portfolio.
Folketrygdfondet has generated an excess return of more than NOK 35 billion since its current mandate was established in 2007.
Government Bond Fund
The Government Bond Fund (GBF) was established at the end of March 2020 to improve liquidity and capital supply in the Norwegian bond market. The Fund has made 90 investments spread over 66 issuers at year-end. The GBF’s capital increased by NOK 312 million in 2020 and the market value of all investments ended at NOK 8.4 billion.
“Our experience is that the GBF has made a difference to many by providing capital in turbulent times,” says Kjetil Houg.
The bond market for the best rated borrowers has seen a positive development recently and is now well-functioning. The GBF has subsequently reduced its activity for investment grade issuers, while maintaining activity in the high yield segment.