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Norway’s Petroleum Fund returns +1.7%

NORWAY – The Norwegian government’s Petroleum Fund returned 1.7% for the third quarter, bolstered by the positive performance of the equity portfolio.

The fund is now worth almost 100 billion euros.

The return on the petroleum fund in the third quarter of 2003 was 1.68% “measured in terms of the currency basket corresponding to the composition of the fund’s benchmark portfolio”. The fund beat the benchmark portfolio, as defined by the Ministry of Finance, by 0.15%.

The total return for the first nine months of 2003 is now 7.68%, beating the benchmark by 0.49%. Knut Kjaer, executive director of Norges Bank Investment Management, manager of the fund, said: “We are very satisfied with the fact that we have beaten the benchmark in every quarter this year.”

In Norwegian crowns the returns of the first nine months are higher, at 16.2% as a result of the crown’s depreciation against the currencies in the benchmark portfolio.

Equities returned 4.24% in the third quarter as a result of a global equity market rally. The fixed income portfolio, however, produced negative returns with –0.15%. The return on the environmental fund was 4.99% for the quarter, and 11.14% for the first nine months.

The market value of the fund’s total securities portfolio rose to 803.3 billion crowns (98.5 billion euros) at the end of the third quarter. This is an increase of 27.8 billion crowns (3.4 billion euros) since the end of the second quarter, and an increase of 194.3 billion crowns (23.8 billion euros) since the beginning of 2003.

The increase since the beginning of the year is partly due to the transfer of new capital (88 billion crowns), partly to the return in capital markets (54 billion crowns) and partly to the depreciation of the Norwegian currency (52 billion crowns).

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