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1Q 2004 Quarterly report

The return on the Government Petroleum Fund in the first quarter of 2004 was 2.93 per cent measured in terms of the currency basket corresponding to the composition of the Fund’s benchmark portfolio.

The first quarter return on the ordinary equity portfolio (excluding the Environmental Fund) was 3.83 per cent measured in terms of the benchmark portfolio’s currency basket. Equity prices in all three main markets, and particularly in Japan, rose through the quarter. The first quarter return on the fixed income portfolio was also positive, at 2.24 per cent measured in terms of the currency basket.

The return on the Petroleum Fund’s ordinary portfolio in the first quarter of 2004 was 0.24 percentage point higher than the return on the benchmark portfolio defined by the Ministry of Finance. Both equity and fixed income portfolio managers achieved an excess return.

In the first quarter of 2004, the return on the Environmental Fund was 4.14 per cent measured in terms of the benchmark’s currency basket.

The market value of the Fund’s combined portfolio of securities was NOK 915.3 billion at the end of the first quarter, which is an increase of NOK 70.0 billion since year-end. The increase in market value is due to several factors: a positive return, the transfer of new capital and a weaker krone against the currencies in which the Fund is invested. NOK 22.1 billion in new capital was transferred to the Fund, while the return on invested capital, measured in international currencies, amounted to NOK 26.1 billion. NOK 21.8 billion of the value increase was due to the depreciation of the krone against the investment currencies. However, the change in the krone exchange rate has no effect on the Fund’s international purchasing power.

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