Norway wealth fund gains US$26b in third quarter

Business | 30 Oct 2019 5:22 pm

Norway’s US$1.1 trillion sovereign wealth fund gained US$26 billion in the third quarter, boosted by gains in U.S. bonds and stocks, Bloomberg reports.

It returned 1.6 percent, or 236 billion kroner (US$26 billion), in quarter.

Stocks ganed by 1.3 percent, bonds by 2.4 percent and real estate by 1.6 percent.

“We saw a particularly positive contribution from U.S. Treasuries and North American stocks, which returned 4.6 percent and 2.9 percent, respectively,” Norges Bank Investment Management Chief Executive Officer Yngve Slyngstad said today.

The world’s biggest fund of its kind closely tracks broader market indexes, but has some leeway to stray from its benchmarks. It has had a meteoric rise since it was founded 20 years ago, and earlier this month exceeded 10 trillion kroner in value as stock markets rallied after a volatile third quarter and the Norwegian currency slumped to a record low.

The fund invests abroad to avoid stoking inflation at home.

The largest stock holdings at the end of the quarter were Microsoft Corp. and Apple Inc.

Its largest bond holdings were in U.S. Treasuries, followed by Japanese government bonds.

The fund continued to pare its emerging market bond holdings after this year receiving approval from the government. The fund has argued it makes little sense to own government bonds across the world since they have become more correlated and that it’s also exposed to a wide array of currency risk through its ballooning stock holdings.

Emerging markets slid to 7.7 percent of the bond portfolio from 7.9 percent at the end of the second quarter.-Photo: Aftenposten

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