The value of the Government Pension Fund - Global increased by NOK 207 billion in the third quarter, to NOK 1 712 billion. The Fund is now the largest pension fund in Europe. The increase in value in the third quarter is the largest quarterly increase in the Fund's history. The increase was due to the transfer of new capital (NOK 79 billion), the positive return on investments and the weaker krone, which increased the market value by NOK 61 billion and NOK 66 billion respectively. The change in the krone exchange rate has no effect on the Fund's international purchasing power, however.
International equity markets declined in the second quarter, particularly in Japan and emerging markets. The return on the international equity portfolios managed by Norges Bank was negative 3.3 per cent. Higher international interest rates resulted in a decline in bond prices.
Total assets under management by NBIM, the investment management arm of the Norwegian central bank, rose to NOK 1715 billon (USD 260 billion) at the end of first quarter 2006. The largest fund under management, The Government Pension Fund - Global, increased by NOK 85 billion during the quarter to NOK 1484 billion.
The document "Principles for Responsible Investment" was published today. The principles were developed by an international group of major institutional investors, on the basis of an initiative by the UN. Norges Bank has participated in this work at the invitation of the United Nations Secretary-General, Kofi Annan
In 2005, the return on the Government Pension Fund - Global was 11.1 per cent measured in international currency and 14.3 per cent measured in NOK. The return on the equity portfolio was 22.5 per cent, whereas the return on the fixed income portfolio was 3.8 per cent. During the last three years, the total return on the Fund has been 32.6 per cent, equivalent to approximately NOK 300 billion. The high return is mainly attributable to a sharp rise in equity prices.