2Q 2003 Quarterly report
The return on the Government Petroleum Fund in the second quarter of 2003 was 7.74 per cent measured in terms of the currency basket that corresponds to the composition of the Fund’s benchmark portfolio. The overall return in the first half of 2003 was 5.90 per cent.
The second quarter return on the equity portfolio was 15.56 per cent measured in terms of the benchmark portfolio’s currency basket. Equity prices in all three main markets rose through the quarter. The return for the quarter on the fixed income portfolio was positive at 2.77 per cent, measured in terms of the currency basket.
The return on the Petroleum Fund’s ordinary portfolio in the second quarter of 2003 was 0.07 percentage point higher than the return on the benchmark portfolio defined by the Ministry of Finance. The overall excess return in the first half of 2003 was 0.31 percentage point.
The second quarter return on the Environmental Fund was 15.32 per cent measured in terms of the benchmark currency basket. The overall return in the first half of 2003 was 5.86 per cent.
During the quarter, capital equivalent to NOK 23.1 billion was transferred to the Petroleum Fund’s international equity and fixed income portfolios. The market value of the Fund’s total securities portfolio was NOK 775 billion at the end of the second quarter, which is an increase of NOK 93 billion during the quarter and an increase of NOK 166 billion since year-end.
The increase in market value is due to several factors: a positive return, the transfer of new capital and a depreciation of the krone against the currencies in which the Fund is invested. The depreciation of the krone exchange rate in the first half of 2003 accounted for about NOK 59 billion. This has no effect on the international purchasing power of the Fund. NOK 66 billion in new capital was transferred to the Fund, while the return on invested capital, measured in international currencies, amounted to about NOK 41 billion.