The Government Pension Fund Global returned 1.3 percent, or €12.6m (DKK 94bn) in the second quarter of 2016. Equity investments returned 0.7 percent, while fixed-income investments returned 2.5 percent. The return on these investments was 0.1 percentage point lower than the return on the benchmark indices. Investments in real estate returned -1.4 percent.
"After a period of relatively stable markets at the beginning of the quarter, the British decision to leave the EU sparked a sharp decline in Europe. Markets recovered relatively quickly, but with major variations between sectors. Financials, for example, performed weakly," says Trond Grande, Deputy Chief Executive Officer of Norges Bank Investment Management.
Interest rate levels in developed markets fell during the second quarter, and especially after the EU referendum in the UK.
"The fund’s fixed-income investments received price gains due to falling interest rates. In the long term, however, lower interest rates have negative implications for future returns on the fixed-income portfolio," says Grande.
In the second quarter €3.23 (DKK 24bn) was withdrawn from the fund. The krone depreciated against the main currencies during the quarter. This increased the value of the fund by €3.76bn (DKK 28bn).
The fund had a market value of €964m (DKK 7.177bn) on 30 June, of which 59.6 percent was invested in equities, 37.4 percent in fixed income and 3.1 percent in real estate.