Government Pension Fund Global
Investment strategy
The Government Pension Fund Global follows the investment strategy laid down by the Ministry of Finance in consultation with advisers including NBIM.
The ministry has decided that 60 percent of the fund shall be invested in equities, 35–40 percent in fixed-income securities and as much as 5 percent in real estate. The most important decision for the fund’s future returns and risk levels is how much capital will be invested in equities, which are expected to have both higher returns and risk over time than the other asset classes. The fund shall only invest outside Norway.
The fund’s management has five main tasks. NBIM invests new capital at the lowest possible cost. NBIM maintains the market portfolio cost-efficiently. NBIM seeks to increase the fund’s returns through active management. NBIM uses its ownership rights to safeguard the fund’s assets by promoting good corporate governance and high social and environmental standards at companies it invests in. NBIM also advises the Ministry of Finance on the fund’s long-term investment strategy.
NBIM’s active management aims to give the fund a higher return than its benchmark indices, adding value for future generations. It involves three strategies: management of the market portfolio, fundamental strategies, and exposure to and risk management of systematic return patterns.
