The result is 0.40 percentage points higher than the benchmark index. Year to date, the total return for the Government Pension Fund Norway is 8.56 percent, which is 0.90 percentage points above the benchmark index.
"After a period of high returns, we are seeing a more moderate development in the third quarter. The fixed-income portfolio benefits from falling interest rates and positive developments in credit spreads. On the equity side, there is a marginal decline, where lower energy prices and positive performance in industrial companies are pulling in opposite directions," says Kjetil Houg, CEO of Folketrygdfondet.
Both the equity and fixed-income portfolios contributed to the excess return. At the sector level, the technology sector contributed the most to the excess return in the equity portfolio, followed by healthcare and energy. For the fixed-income portfolio, positions in finance and industry were the key contributors.
"So far this year, the fund has grown by over 30 billion NOK, and we are ahead of the market in both the equity and fixed-income segments. We continue to deliver stable and solid results for the benefit of the public," says Houg.
Diverging Trends in the Nordic Region
While the Norwegian stock market remained nearly flat with a decline of 0.4 percent, the Swedish and Finnish markets rose by 4.0 and 4.5 percent, respectively, during the quarter. After a period of strong returns, the Danish market fell by 12.8 percent in the third quarter.
"There is a significant variation in returns across the Nordic stock exchanges, but overall, the Nordic region continues to stand out as a strong investment area," says Houg.
Key Figures from the Report
- The return on the equity portfolio was -0.08 percent in the third quarter, which is 0.33 percentage points higher than the benchmark index for equities.
- The return on the fixed-income portfolio was 4.26 percent in the third quarter, which is 0.51 percentage points higher than the benchmark index for fixed income.
- Since 2007, Folketrygdfondet’s active management has contributed over 59 billion NOK in excess returns to the public.