Norway’s Government Pension Fund Global (GPFG) added to its equity returns in the third quarter of this year, though at a slower rate than before, with North American stocks – led by tech giants Apple and Alphabet – proving the strongest performers in the period, the sovereign wealth fund reported.
In its interim report, the manager of the fund, Norges Bank Investment Management (NBIM), said the GPFG made a third quarter return of 1.6% overall, or NOK236bn (€23bn). Equities returned 1.3%, and fixed income and unlisted real estate generated 2.4% and 1.6% respectively.
The overall return is down from the 2.9% the fund produced in the second quarter and the 9.1% first quarter return.
Yngve Slyngstad, NBIM’s chief executive – who has just announced he is to step down from the role – said: “Equity and fixed income investments had another quarter with positive returns. We saw a particularly positive contribution from US Treasuries and North American stocks, which returned 4.6 and 2.9 percent respectively.”
NBIM said the overall return on the fund was in line with its benchmark.
Slyngstad said the equity returns – totalling NOK1trn from January to September – had helped the fund’s market value to rise considerably, but warned: “With a large part of the fund invested in equities, we must be prepared for large fluctuations in the fund’s market value.”
The GPFG’s value rose to NOK9.7trn by 30 September, though it has since risen further to NOK10.1trn today.
Among individual stocks, NBIM said in its interim report that its investment in Apple stocks made the most positive contribution to the return in the third quarter, followed by that in Alphabet shares, and in consumer goods company Nestlé.
The “most negative contributions” came from the fund’s shares in Amazon.com, Royal Dutch Shell and German tech firm SAP, it said.
According to data on Nasdaq’s website, the shares of both Apple and Alphabet gained 11% in value between July and September.
At the end of 2018, the GPFG had NOK62.7bn invested in Apple shares and NOK57.6bn in Alphabet.