Government Pension Fund Global, Oslo, returned 10.9% in 2020, despite a year characterized by uncertainty and major fluctuations.
The sovereign wealth fund's investment return was equivalent to 1.07 trillion Norwegian kroner ($124.9 billion). The fund returned 19.9% in 2019, or 1.69 trillion kroner.
For the three months ended Dec. 31, the fund returned 10%. The fourth-quarter 2019 return was not available.
GPFG's annualized return over the 10 years ended Dec. 31 was 8%, compared with 7.8% for the decade ended Dec. 31, 2019.
Assets grew 8.2% over the year to 10.91 trillion kroner as of Dec. 31.
Equity investments gained 12.1% in 2020, compared with 26% in 2019. Exposure to technology stocks contributed the biggest return overall at 41.9%, followed by industrials and consumer goods, according to a presentation published Thursday. Return figures for industrials and consumer goods were not available.
Fixed-income allocations gained 7.5%, compared with 7.6% last year, while unlisted real estate returned -0.1%, vs. a 6.8% gain in 2019.
"Despite the pandemic having put its mark on 2020, it has been yet another good year for the fund. The fund's overall return in 2020 was the second highest since 1998 measured in kroner. However, the high return also reminds us that the market value of the fund might vary a lot going forward," Oystein Olsen, chairman of the executive board, said in a news release accompanying the presentation.
The year "has been characterized by major fluctuations in the market, and big differences between different sectors," Nicolai Tangen, CEO of in-house manager Norges Bank Investment Management, said in the same release.
The Norwegian kroner depreciated against several main currencies in 2020, adding 58 billion kroner to the fund, while 298 billion kroner was withdrawn from GPFG.
The fund's asset allocation as of Dec. 31 was 72.8% equities, 24.7% fixed income and 2.5% unlisted real estate. That compared with 70.8% equities, 26.5% fixed income and 2.7% unlisted real estate a year earlier.
