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Investment Strategy

Government Pension Fund Norway (GPFN)

The objective for the management of the GPFN is to maximise financial returns measured in Norwegian kroner, given a moderate level of risk. The main part of the assets of the GPFN is invested in the Norwegian equity and fixed income markets.

The GPFN is a major owner and lender in the Norwegian capital market. At yearend 2016 the Norwegian equity portfolio represented about 10 percent of the market value of the main index of the Oslo Stock Exchange (OSEBX), whilst the Norwegian bond portfolio represented about 3 percent of the Norwegian fixed-income market.

The characteristics of the Fund, such as size and a long time horizon, distinguish the GPFN from many other investors in the Norwegian market. Size entails certain benefits, including the ability to exploit economies of scale in the asset management activities. At the same time, the relative size of the GPFN in the Norwegian capital market results in certain limitations as to opportunities for major changes to the composition of the portfolio over a short period of time. The market is, moreover, characterised by low liquidity in several companies. This adds to the challenges associated with major portfolio adjustments.

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