The Government Pension Fund Global, Oslo, returned 19.9% in 2019, driven by positive equity returns around the globe.
The 10.09 trillion Norwegian kroner ($1.15 trillion) sovereign wealth fund said in its 2019 annual report that the return equated to 1.7 trillion kroner — the highest kroner return in the fund's history.
The percentage return is the second highest for the fund "topped only by the rebound from the financial crisis in 2009" when returns hit 25.6%, said Yngve Slyngstad, CEO at Norges Bank Investment Management. NBIM manages the assets of the SWF.
In 2018 the fund return was -6.1%, equating to a 485 billion kroner loss.
Assets grew 22.2% for the year ended Dec. 31.
The fund's 70.8% equity allocation gained 26% in 2019, compared with a 9.5% loss for the fund's 66.3% equity exposure in 2018.
Fixed-income exposure of 26.5% returned 7.6%, compared with a 0.6% gain in 2018 when the allocation as 30.7%.
Real estate assets made up the remaining 2.7% of the fund, compared with 3% in 2018. The real estate allocation gained 6.8% in 2019, compared with 7.5% in 2018.
GPFG's largest geographical exposure was to North America, at 43.9%, a slight increase from the 2018 allocation of 43%. Allocations to Europe decreased to 33.7% from 34.1%; and Asia-Pacific exposure fell slightly, to 19.2% from 19.3% a year earlier. Emerging markets allocations fell to 10.1% from 10.3%, the report said.
Currency markets also impacted the fund, with a depreciation of the kroner against other main currencies adding 127 billion kroner to assets. In 2018, currency moves added 224 billion kroner to the fund. The Norwegian government also transferred 18 billion kroner into the fund, following a 34 billion kroner inflow in 2018.
This week the applicant list for the fund's CEO position was also revealed. In October, the fund announced that Mr. Slyngstad would step down once a replacement has been appointed.
The deadline for applications for the role was Feb. 21, and information published on NBIM's website showed eight men had applied for the position.
