3Q Quarterly report 2002
In the third quarter of 2002, the return on the Government Petroleum Fund, including the Environmental Fund, was -5.13 per cent measured by the currency basket that corresponds to the composition of the Fund’s benchmark portfolio. The overall return for the first three quarters of 2002 was -7.36 per cent.
The currency basket in which the Petroleum Fund is invested depreciated by approximately 1 per cent against the Norwegian krone in the third quarter. Measured in NOK, the return in the third quarter was therefore somewhat more negative, at -6.29 per cent. Following a substantial appreciation of the krone in the second quarter, the combined return for the first three quarters, measured in NOK, was -18.49 per cent. However, changes in the value of the krone have no effect on the international purchasing power of the Fund.
The third quarter return on the ordinary equity portfolio (excluding the Environmental Fund) was -19.72 per cent measured by the benchmark portfolio’s currency basket. This reflects the sharp fall through the quarter of share prices in the three main markets, the US, Europe and Japan. Following the fall in interest rates in the US and the euro area in particular, a positive return of 4.72 per cent, measured in terms of the currency basket, was recorded for the fixed income portfolio.
The return on the Petroleum Fund’s ordinary portfolio in the third quarter of 2002 was 0.14 percentage point lower than the return on the benchmark portfolio defined by the Ministry of Finance. The actual return recorded for the first three quarters of the year as a whole was 0.08 percentage point higher than the benchmark return.
The return on Environmental Fund in the third quarter was -19.07 per cent measured in terms of the benchmark portfolio currency basket, and -20.07 per cent measured in NOK. The combined return for the first three quarters of 2002 was -28.17 per cent measured in terms of the currency basket and -36.81 per cent measured in NOK.
In the third quarter, capital equivalent to NOK 37.6 billion was transferred to the Petroleum Fund’s equity and fixed income portfolios. The market value in NOK of the Fund’s combined securities portfolio was NOK 603.6 billion at the end of the third quarter. This is slightly down on the beginning of the quarter, and is largely due to the strongly negative return on the equity portfolio.