Investment Strategy

Government Pension Fund Global (GPFG)

The investment strategy of the GPFG has been developed over time, based on comprehensive professional assessments. The objective of the Fund's investments is to achieve the highest possible return over time, given a moderate level of 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 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 strategy is in particular characterized by:

  – Broad diversification of investments
  – Harvesting risk premiums over time                                                                   – Moderate scope for deviations from the benchmark index                             – Responsible management                                                                        
  – Cost efficiency                                                                                                 
  – A clear governance structure

The investment strategy is based on the principle that to achieve a satisfactory long-term return one must assume risk. The management of the GPFG does thus not aim to minimise fluctuations in the return on Fund assets. Such a strategy would produce a significantly lower expected return over time.