Government Pension Fund Global Second quarter 2019 Oslo, 21 - - PowerPoint PPT Presentation

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Government Pension Fund Global Second quarter 2019 Oslo, 21 - - PowerPoint PPT Presentation

Oct 31, 2023 28 likes •234 views

Government Pension Fund Global Second quarter 2019 Oslo, 21 August 2019 Highlights The market value of the fund increased by 224 billion kroner to 9,162 billion kroner The fund returned 3.0 percent in the second quarter of 2019 The

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Government Pension Fund Global

Second quarter 2019

Oslo, 21 August 2019

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SLIDE 2

Highlights

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▪ The market value of the fund increased by 224 billion kroner to 9,162 billion kroner ▪ The fund returned 3.0 percent in the second quarter of 2019 ▪ The return on the fund was 0.19 percentage point lower than the return on the

reference index

▪ At the end of the quarter, the fund was invested as follows:

  • Equity investments

69.3 percent

  • Unlisted real estate investments

2.7 percent

  • Fixed-income investments

28.0 percent

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SLIDE 3

Market value increased to 9,162 billion kroner

Billions of kroner. As at 30.06.2019

3 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 09 10 11 12 13 14 15 16 17 18 19

Fixed income Real estate Equity

Value Percentage share Equity investments 6,348 69.3 Unlisted real estate investments 247 2.7 Fixed-income investments 2,567 28.0 Fund 9,162 100

Source: Norges Bank Investment Management

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256 billion kroner in return

Billions of kroner

4

  • 750
  • 500
  • 250

250 500 750

  • 750
  • 500
  • 250

250 500 750 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Return Inflow/withdrawal

Q2 2019 Return 256 Inflow 6

Source: Norges Bank Investment Management

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  • 750
  • 500
  • 250

250 500 750

  • 750
  • 500
  • 250

250 500 750 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Krone rate Return Inflow/withdrawal Total

256 billion kroner in return

Billions of kroner

5

Q2 2019 Return 256 Inflow 6 Krone rate

  • 38

Total 224

Source: Norges Bank Investment Management

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3.0 percent quarterly return

Measured in the fund’s currency basket. Quarterly return. Percent

6

  • 15
  • 10
  • 5

5 10 15

  • 15
  • 10
  • 5

5 10 15 09 10 11 11 12 13 14 14 15 16 17 17 18 19

3.0

Source: Norges Bank Investment Management

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Strongest return for fixed income

Measured in the fund’s currency basket. Percent

7

  • 15
  • 10
  • 5

5 10 15

  • 15
  • 10
  • 5

5 10 15 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Equity investments Real estate investments Fixed-income investments

2019 Q2 2019 Equity investments 15.6 % 3.0 % Unlisted real estate investments 2.5 % 0.8 % Fixed-income investments 6.0 % 3.1 %

Source: Norges Bank Investment Management

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Fund’s relative return

Quarterly return relative to reference index. Percentage points

8

Equity and fixed-income investments until end of 2016. Source: Norges Bank Investment Management

  • 2.0
  • 1.5
  • 1.0
  • 0.5

0.0 0.5 1.0 1.5 2.0

  • 2.0
  • 1.5
  • 1.0
  • 0.5

0.0 0.5 1.0 1.5 2.0 2.5 09 10 11 12 13 14 15 16 17 18 19

  • 0.19
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Changes in value since 1996

Billions of kroner

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30.06.2019 31.03.2019 31.12.2018 Total inflow of capital* 3,382 3,376 3,371 Total return on fund 4,660 4,404 3,666 Total management fees

  • 46
  • 45
  • 44

Changes due to fluctuations in krone 1,165 1,203 1,263 Market value of the fund 9,162 8,938 8,256

Source: Norges Bank Investment Management *Total inflow of capital is adjusted for accrued, not paid, management fees.

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Key figures per second quarter

Measured in the fund’s currency basket. Annualised. Percent

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Since 1.1.1998 Last 10 years Return on fund 5.91 8.83 Annual inflation 1.79 1.73 Annual management costs 0.08 0.07 Annual net real return on fund 3.97 6.91

Source: Norges Bank Investment Management

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Developments in equity sectors

Measured in USD. Indexed total return (31.12.2018 = 100)

11 90 100 110 120 130 140 90 100 110 120 130 140 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

Technology Industrials Financials Oil & gas Health care

Technology Industrials Financials Oil and gas Health care Q2 2019 3.7% 5.2% 5.2%

  • 1.3%

1.2% Year-to-date 22.5% 21.2% 15.9% 13.2% 9.9%

Source: FTSE Russell

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90 100 110 120 130 140 90 100 110 120 130 140 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

FTSE Global All Cap index* Equity part of the fund's reference index S&P 500 (US) Stoxx Europe 600 (Europe) MSCI Asia Pacific (Asia)

Developments in equity markets

Measured in the fund’s currency basket (S&P 500 and MSCI Asia Pacific in USD, Stoxx Europe 600 in EUR). Indexed total return (31.12.2018 = 100)

12

FTSE Global All Cap index* Equity part of the fund’s benchmark index S&P 500 Stoxx Europe 600 MSCI Asia Pacific Q2 2019 3.1% 3.2% 4.3% 3.4% 0.9% Year-to-date 16.2% 15.5% 18.5% 17.1% 10.7%

Source: Bloomberg * Excluding Norway

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SLIDE 13

10-year government bond yields

Percent

13

  • 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

  • 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

Germany US Japan UK Spain Italy

Source: Bloomberg

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Large holdings with negative yield

Percent of fixed-income investments

14 5 10 15 20 25 5 10 15 20 25 Dec-14 Sep-15 Jun-16 Mar-17 Dec-17 Sep-18 Jun-19

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10-year government bond yields

Percent

15 2 4 6 8 10 12 14 16 18 20 22 2 4 6 8 10 12 14 16 18 20 22 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

Turkey Brazil South Africa Indonesia Mexico

Source: Bloomberg

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Real estate acquisitions and disposals

ACQUISITIONS DISPOSALS

Announced in the second quarter of 2019. Unlisted real estate

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Location Sector Purchase price Share Extended partnership 12 assets in Hudson Square-area, New York, US Office 831 million kroner 48 percent Logistics properties in US/ Spain and the Netherlands Logistics 1.2 billion kroner 45/50 percent Location Sector Sale price Share «Die Welle» in An der Welle, Frankfurt, Germany Office 3.0 billion kroner 50 percent

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Peak season for voting

▪ The second quarter accounts for around two-thirds of our voting in a year

  • Voted at 6,918 meetings
  • Evaluated and voted at 81,237 proposals

▪ We published three voting intentions during the quarter

  • Voting at board members on regular intervals
  • Board candidates for voting should be made public
  • Reporting on water management

17

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Observation and exclusions

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▪ June: Revokal of exclusion of seven companies ▪ March: Exclusion of one company ▪ January: Exclusion of three companies Announced in first half 2019

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Highlights

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▪ The market value of the fund increased by 224 billion kroner to 9,162 billion kroner ▪ The fund returned 3.0 percent in the second quarter of 2019 ▪ The return on the fund was 0.19 percentage point lower than the return on the

reference index

▪ At the end of the quarter, the fund was invested as follows:

  • Equity investments

69.3 percent

  • Unlisted real estate investments

2.7 percent

  • Fixed-income investments

28.0 percent

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SLIDE 20

Government Pension Fund Global

Second quarter 2019

Oslo, 21 August 2019