Folketrygdfondet is a long-term financial investment manager with the aim of achieving maximum returns on investments over time within determined limits for the management.
A benchmark portfolio is an important basis both to steer the risk in operational management and to measure the results which are achieved through the management. The Ministry of Finance determines the benchmark portfolio for the Government Pension Fund and the Government Bond Fund, both of which reflect the Ministry's investment strategy.
In evaluating the results Folketrygdfondet achieves, the Ministry of Finance emphasizes additional yields over time. Therefore we have the aim that our return shall exceed the returns of the benchmark portfolio. This means that Folketrygdfondet is a relative investment manager.
The Ministry of Finance also determines a limit for prospective relative volatility for the Government Pension Fund. This is a risk limit implying that the Ministry has set a limit as to how much the portfolio's expected returns can deviate from the benchmark portfolio returns. Within this risk limit Folketrygdfondet may pursue active managment by composing a portfolio that deviates from the benchmark portfolio. Therefore, Folketrygdfondet will assess whether to invest more or less in individual companies in the benchmark portfolio, which shall give additional yields over time.
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