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Oil Fund Tops 5 Trillion Kroner in Market Value

2 December 2013

The market value of the Government Pension Fund Global rose today to 5 trillion kroner, 17 years after the initial 2 billion capital transfer from the Ministry of Finance.

The market value equals about 818 billion dollars. The fund reached 2 trillion kroner in October 2007 and 3 trillion kroner in October 2010. 4 trillion kroner was reached in February this year. The fund’s market value has grown substantially the last year, from 3,816 billion kroner at end of 2012 to 5,000 billion kroner today.

A krone depreciation the last weeks made the fund reach 5 trillion kroner sooner than expected. As a consequence, variations above and below 5 trillion kroner must be expected going forward.

The management of the fund has created excess returns beyond the transfers from the Ministry of Finance. A third of the fund’s market value as of today is return on investments. The market value is determined by inflows of capital, returns and fluctuations in the krone exchange rate.

The fund had 3,239 billion kroner in capital inflow and 1,572 billion kroner in returns between May 1996 and 30 September 2013, while changes in the krone exchange rate reduced the market value by 74 billion kroner.

The investment universe has been expanded to include equities, fixed income and real estate since the first capital injection of 1.98 billion kroner in 1996. The fund was invested 63.6 percent in equities, 35.5 percent in fixed income and 0.9 percent in real estate at the end of the third quarter 2013.