Government Pension Fund Global, Oslo, returned 4.3% in the third quarter, led by the sovereign wealth fund's equity exposure.
The return was equivalent to 412 billion Norwegian kronor ($43.6 billion), according to an update Thursday. The investment return in the second quarter was 13.1%, following a -14.6% return in the first quarter as the fund was battered by the effects of the coronavirus pandemic. For the third quarter 2019, the fund gained 1.6%.
The overall return was 3 basis points lower than that of the benchmark index, which is set by the Norwegian Ministry of Finance.
Assets fell 1.2% over the quarter but grew 8.9% over the year to 10.61 trillion kronor as of Sept. 30.
The 70.7% allocation to equities gained 5.7% over the quarter, compared with a gain of 18.1% in the previous quarter and 1.3% in the third quarter 2019.
A 26.6% allocation to fixed income returned 1.1%, vs. 3.8% in the second quarter and 2.4% in the third quarter 2019. The remaining 2.7% of the fund, invested in unlisted real estate, gained 0.9%, vs. a -2% return in the second quarter and a 1.6% gain in the third quarter 2019.
"The financial markets were still influenced by uncertainty related to the coronavirus," Nicolai Tangen, CEO of Norges Bank Investment Management — which runs the fund's assets — said in the update. "Regardless, equity markets returned well, mostly due to strong performance in the technology sector in U.S."
The kronor appreciated against some of the main currencies in the quarter, decreasing the fund's value by 97 billion kronor. Currency movements for the second quarter were not available. For the third quarter 2019, currency movements added 349 billion kronor to the fund's value.