Norway's Government Pension Fund Global, Oslo, returned -0.6% in the quarter ended March 31, with assets falling 5.3% to 7.08 trillion Norwegian kroner ($848 billion) as market volatility hit, and the government withdrew money for the first time.
In a financial update Thursday, Norges Bank Investment Management, which runs the assets of the sovereign wealth fund, said the return was equivalent to an 85 billion Norwegian kroner loss. In the three months ended Dec. 31, returns were 3.5%, or 279 billion Norwegian kroner. Over the year ended March 31, assets increased 1%.
Equities investments returned -2.9% for the quarter, compared with 5.8% for the three months ended Dec. 31. Real estate investments returned -1.3%, vs. 1.6% for the quarter ended Dec. 31.
Fixed-income allocations, however, partially offset negative returns, gaining 3.3% in the three months ended March 31. That compared with 0.07% the previous quarter.
As of March 31, the sovereign wealth fund's asset allocation was 60% equities, 37% fixed-income and 3% real estate.
Fluctuations in the Norwegian kroner, which appreciated vs. other currencies, accounted for a 286 billion Norwegian kroner loss to the sovereign wealth fund in the first quarter. For the three months ended Dec. 31, currency changes added 164 billion Norwegian kroner.
“The year began with a decline in global equity markets, driven mainly by an ailing Chinese market,” the fund's update said.
The Norwegian government withdrew money from the sovereign wealth fund for the first time, said a news release accompanying the update. “The withdrawals amounted to 25 billion kroner in the first quarter,” it said. The news release did not provide a reason for the withdrawal.
Spokesmen at NBIM could not be reached for comment by press time.