Long-term management in volatile financial markets

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– 2018 was a challenging year with weak performance for both funds. Such periods clearly illustrate how important it is to have broad endorsement, a long-term perspective and a thorough understanding of the risk assumed in the management of our joint savings. Financial markets fluctuate, but the management should be stable, says Siv Jensen, Minister of Finance.

The Government is today submitting the Government Pension Fund 2019 report to the Storting. This report presents the investment strategies and the performance achieved in the management of the Government Pension Fund Global (GPFG) and the Government Pension Fund Norway (GPFN). It also discusses further development of the investment strategies and the work on responsible management.

Performance of the Government Pension Fund in 2018
The GPFG registered a return of -6.1 percent in 2018, whilst the GPFN registered a return of -0.4 percent.

The value of the GPFG and the GPFN was NOK 8,251 billion and NOK 239 billion, respectively, at the end of 2018.

– Last year was characterised by volatile financial markets and weak performance. The return on the GPFG in 2018 was the second-weakest in the history of the fund. However, this was by no means an extraordinary year in the financial markets. History has repeatedly reminded us that we need to be prepared for large and sudden market fluctuations, says Siv Jensen, Minister of Finance.

Review of Folketrygdfondet’s management of the GPFN
The Ministry of Finance reviews the management of the two funds on a regular basis. Key issues for such reviews are whether favourable asset management performance has been achieved over time and whether the limit on deviations from the benchmark index should be changed.

The review of the management of the GPFN presented in the report shows that the performance achieved by Folketrygdfondet over time is favourable. In 2018, the GPFN outperformed the benchmark index by 0.8 percentage points, and the annual average excess return since 2007 has been 1.0 percentage point.

In order to ensure that the benchmark is tracked in a cost-effective manner and in order to achieve excess return over time, the management of the GPFN may deviate somewhat from the benchmark. The Ministry of Finance has stipulated a limit allowing a deviation of up to 3 percentage points from the benchmark. No change is proposed to this limit.

– There is every reason to be satisfied with the performance achieved by Folketrygdfondet over time. The excess return since 2007 has been robust and costs are low, says the Minister of Finance.

Key figures for the Government Pension Fund




Value at yearend 2018



Market value

NOK 8,251 billion

NOK 239 billion

Equity share

66.3 percent

59.0 percent

Fixed income share

30.7 percent

41.0 percent

Unlisted real estate share

3.0 percent





Performance 2018



Total return

-6.1 percent

-0.4 percent

Equity return

-9.5 percent

-1.8 percent

Fixed income return

0.6 percent

1.7 percent

Unlisted real estate return

7.5 percent


Total excess return

-0.3 percent

0.8 percent

Costs as a share of assets

0.05 percent

0.06 percent

Costs in NOK

NOK 4,544 million

NOK 159 million




Real rate of return over the last 20 years

3.3 percent

5.3 percent




Risk at yearend 2018



Expected relative volatility

0.3 percentage points

0.4 percentage points

Expected absolute volatility in NOK

NOK 710 billion

NOK 15 billion