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Performance results - GIPS

Norges Bank Investment Management claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards.

18 March 2011

NBIM has been independently verified for the periods 31 December 1997 through 31 December 2010. The verification reports are available upon request.
Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.


NBIM has been independently verified for the period 31 December 1997 through 31 December 2010. The third party verifier’s reports 2010. 

The firm
NBIM as the firm is the investment management division of Norges Bank – the central bank of Norway. NBIM manages the Government Pension Fund Global (Pension Fund), the major part of Norges Bank’s foreign exchange reserves (Reserves Fund) and the Government Petroleum Insurance Fund (Insurance Fund).

Firm assets
Total firms assets are defined as the sum of the Government Pension Fund Global, the investment portfolio of Norges Bank’s foreign exchange reserves, the Government Petroleum Insurance Fund, and the Petroleum Buffer portfolio of Norges Bank’s foreign exchange reserves. The money market portfolio of Norges Bank’s foreign exchange reserves is managed by the Market Operations and Analysis Department of the Norges Bank Monetary Policy division and is not part of firm assets. On close of 31 December 2010 the Insurance Fund was terminated and its assets were moved to the Pension Fund since the Pension Fund is able to buffer large and unexpected claims arising from petroleum activities on its own. The termination of the Insurance Fund was approved by the Norwegian Parliament after proposal from the Ministry of Finance. The termination was treated as an inflow to the Pension Fund and an outflow from the Insurance Fund and the Insurance Fund’s assets are therefore zero at year-end.

Calculation methodology
NBIM implements a time-weighted rate of return methodology in the return calculations. The fair value is determined on the day of a large external cash flow and interim returns are geometrically linked. NBIM do not operate with a minimum asset level. All portfolios are accounted for in the composite. All portfolio returns are calculated net of non-reclaimable withholding taxes on dividend, interest and capital gains. Withholding taxes are recognized when incurred. NBIM uses accrual accounting for interest income and dividends. NBIM has not adopted a significant cash flow policy since the portfolios are valued daily and hence at each point of external cash flow. NBIM also has a detailed rebalancing regime which sets forth the rules for allocation of the inflow capital.

Assets and liabilities are reported on a fair value basis and in Norwegian kroner (NOK). Fair value is the estimated realisable value of an asset or the estimated cost of settling a liability in an arm’s length transaction between well-informed and willing parties. The sources of valuation and pricing follow the NBIM pricing hierarchy which is well aligned with the GIPS standards’ recommendation. Performance is reported in terms of an international currency basket corresponding to the currency composition of the Fund’s benchmark portfolio. This measure reflects the true performance of the Fund and isolates the effects of the NOK fluctuating against the currencies in which the benchmark is invested. Movements in the NOK do not affect the international purchasing power of the Fund.

Additional information
NBIM’s list of composite descriptions is available upon request. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. 

Read the whole report (PDF)