Investment Strategy

Government Pension Fund Global (GPFG)

The objective of Fund investments is to achieve the highest possible return over time, given an acceptable level of risk. The Fund shall be managed responsibly within this overarching financial objective.

GPFG investment strategy

The GPFG investment strategy is derived from the Fund's objective and distinctive characteristics, as well as comparative advantages of the asset manager and assumptions as to the functioning of the financial markets. The investment strategy has been developed over time, based on thorough assessments, professional recommendations, and practical experience. Key Fund management choices have been endorsed by the Parliament.

The investment strategy is in particular characterized by:

  • Broad diversification of investments
  • Harvesting risk premiums over time
  • Rebalancing of the equity share
  • Moderate scope for deviations from the benchmark index
  • Responsible management
  • Cost efficiency
  • Transparency

The investment strategy is based on the principle that to achieve a satisfactory long-term return one must assume risk. The Fund has, generally speaking, a high risk bearing capacity. The appropriate risk level for the Fund will, nevertheless, depend on the risk tolerance of the owners, represented by the political authorities.

The choice of equity share is the one decision with the greatest impact on overall risk in the Fund. Through their endorsement of the equity share, the Fund’s owners, represented by the Government and the Parliament, have indicated what is considered an acceptable level of risk.