The Government Pension Fund Norway (GPFN) – the locally invested part of the overall government pension fund, which includes the much larger Government Pension Fund Global (GPFG) – produced a first-quarter return of 5.8%.

The fund’s manager, Folketrygdfondet, said the fund made an investment profit of NOK10.7bn (€1.3bn) between January and March, with total assets rising to NOK196.4bn.

In percentage terms, the return beats that reported last month by the NOK7trn GPFG, of 5.3%.

At the domestic fund, equities generated 9.2% in the three-month period, while bonds produced a return of 1%, it said.

The domestic pension fund has 60% of assets in equities and 40% in bonds.

Eighty-five percent of its assets are invested in Norway itself, and the remaining 15% in other Nordic countries.

Olaug Svarva, Folketrygdfondet’s chief executive, said: “We have had a good start to the year, with buoyant activity in the stock market, while activity in the bond market has been somewhat more subdued.”

In the fund’s quarterly report, Folketrygdfondet said the 5.8% return represented 0.2 percentage points of outperformance compared with the reference index.

The Norwegian equities market as measured by the main index on the Oslo stock exchange had risen by 7.5% in the first quarter, it said, commenting that this was somewhat weaker than the growth seen on international share markets.

The decline seen in 2014 in energy sector share prices had stopped in the meantime, the manager said, with the sector climbing slightly in the first quarter. 

Equities markets in other Nordic countries increased by 15.8% according to the index, it said.

Meanwhile, yields on long government bonds fell further in the first quarter, with yields on German and Danish government notes with up to 10 years to maturity negative or virtually zero.