The world's largest sovereign wealth fund, Norway's Government Pension Fund Global, gained 5.1% in the first month of 2023 after losing a record 14.1%, or $159 billion, last year amid the conflict in Ukraine and high inflation, Norges Bank Investment Management said on Tuesday
MOSCOW (Pakistan Point News / Sputnik - 31st January, 2023) The world's largest sovereign wealth fund, Norway's Government Pension Fund Global, gained 5.1% in the first month of 2023 after losing a record 14.1%, or $159 billion, last year amid the conflict in Ukraine and high inflation, Norges Bank Investment Management said on Tuesday.
"In 2022, the Government Pension Fund Global returned -14.1 percent, equivalent to -1,637 billion kroner ....The return on unlisted renewable energy infrastructure was 5.1 percent," Norges Bank Investment Management said in a statement.
In addition, the fund's equities had a negative return of 15.3%, bonds lost 12.1%, while investments in unlisted real estate gained 0.1%.
The statement, however, added that the fund outperformed its benchmark index set by the Norwegian Finance Ministry by 0.88 percentage points.
According to the head of Norges Bank Investment Management, Nicolai Tangen, the decrease in the annual return last year was caused by the conflict in Ukraine, high inflation and rising interest rates.
"The market was impacted by war in Europe, high inflation, and rising interest rates. This negatively impacted both the equity market and bond market at the same time, which is very unusual. All the sectors in the equity market had negative returns, with the exception of energy," Tangen said.
However, the fund as a whole did not shrink in 2022 despite large negative returns, since Norway received a huge amount of money from oil and gas supplies, boosted by Western sanctions on Russia's energy sector.
Government Pension Fund Global was established in 1990. The fund is managed by Norges Bank Investment Management, a division of the Norwegian central bank. The value of the fund as of December 31 was almost $1.3 trillion.
