GOVERNMENT PENSION FUND GLOBAL THIRD QUARTER 2017 27 OCTOBER 2017 - - PowerPoint PPT Presentation

GOVERNMENT PENSION FUND GLOBAL

THIRD QUARTER 2017

27 OCTOBER 2017

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 07 08 09 10 11 12 13 14 15 16 17 Real estate investments Fixed-income investments Equity investments

Market value at 7,952 billion

Billions of kroner. As at 30.09.2017

2

Value Percentage share Equity investments 5,242 65.9 Fixed-income investments 2,511 31.6 Unlisted real estate investments 199 2.5

3

Tuesday 19 September 2017 at 02:01 CET:

$ 1,000,000,000,000

Withdraw al from the fund

Billions of kroner

4

• 10

41

• 30
• 20
• 10

10 20 30 40 50 60

• 30
• 20
• 10

10 20 30 40 50 60 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017

Withdrawal Average quarterly inflow last 10 years

• 500
• 400
• 300
• 200
• 100

100 200 300 400 500

• 500
• 400
• 300
• 200
• 100

100 200 300 400 500 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017

Return Withdrawal

Quarterly change in market value

Billions of kroner

5

3Q 2017 Return 192 Withdrawal

• 10

• 500
• 400
• 300
• 200
• 100

100 200 300 400 500

• 500
• 400
• 300
• 200
• 100

100 200 300 400 500 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017

Krone rate Return Withdrawal Total

Currency effect decreased market value

Billions of kroner

6

3Q 2017 Return 192 Withdrawal

• 10

Krone rate

• 250

Total

• 68

Positive return at 3.2 percent

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

7

• 15
• 10
• 5

5 10 15

• 15
• 10
• 5

5 10 15 07 08 09 10 11 12 13 14 15 16 17 3.2

Positive return in all asset classes

Measured in the fund’s currency basket. Percent

8

• 8
• 6
• 4
• 2

2 4 6 8

• 8
• 6
• 4
• 2

2 4 6 8 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017

Equity investments Fixed-income investments Real estate investments

3Q 2017 Equity investments 4.3 % Fixed-income investments 0.8 % Real estate investments (unlisted) 2.7 % Total 3.2 %

• 2.5
• 2.0
• 1.5
• 1.0
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5

• 2.5
• 2.0
• 1.5
• 1.0
• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 07 08 09 10 11 12 13 14 15 16 17 0.10

Fund relative return

Percentage points

9

Equity and fixed-income investments until 2016.

Changes in value since 1996

30.09.2017 30.06.2017 Gross inflow of new capital 3,351 3,360 Accumulated return 3,814 3,622 Management costs

• 38
• 37

Changes due to fluctuations in krone 826 1,076 Market value of the fund 7,952 8,020

Billions of kroner

10

Historical key figures

Since 1.1.1998 Last 10 years Return on fund 5.98 5.73 Annual inflation 1.76 1.73 Annual management costs 0.09 0.08 Annual net real return on fund 4.06 3.85

Measured in the currency basket. Annualised. Percent

11

70 80 90 100 110 120 130 70 80 90 100 110 120 130 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17

FTSE Global All Cap (global) Stoxx Europe 600 (Europe) MSCI Asia Pacific (Asia) S&P 500 (USA)

Developments in equity markets

Measured in USD (Stoxx in EUR). Indexed total return (31.12.2016 = 100)

12

FTSE Global All Cap S&P 500 Stoxx Europe 600 MSCI Asia Pacific 3Q 2017 5.3 % 4.5 % 2.7 % 5.2 % Year to date 17.4 % 14.2 % 10.5 % 21.9 %

60 70 80 90 100 110 120 130 60 70 80 90 100 110 120 130 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17

Technology Industrials Basic materials Consumer services Oil and gas

Developments in equity sectors

Measured in USD. Indexed total return (31.12.2016 = 100)

13

Technology Industrials Basic materials Consumer services Oil and gas 3Q 2017 7.8 % 6.4 % 10.0 % 2.0 % 9.5 % Year to date 27.9 % 21.5 % 21.3 % 12.3 %

• 0.4 %

90 95 100 105 110 90 95 100 105 110 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17

Dollar Euro Pound Yen

Development for bonds

Measured in local currency. Indexed total return (31.12.2016 = 100)

14

Dollar Euro Pound Yen 3Q 2017 0.9 % 0.7 %

• 0.3 %

0.1 % Year to date 3.3 % 0.1 % 0.5 %

• 0.2 %

85 90 95 100 105 110 115 85 90 95 100 105 110 115 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17

Government bonds Government-related bonds Inflation-linked bonds Corporate bonds Securitised bonds

Development for bond sectors

Measured in USD. Indexed total return (31.12.2016 = 100)

15

Government bonds Government- related bonds Inflation- linked bonds Corporate bonds Securitised bonds 3Q 2017 1.6 % 2.3 % 2.2 % 2.2 % 1.4 % Year to date 6.1 % 7.7 % 5.7 % 7.5 % 3.9 %

New real estate acquisitions

16

Third quarter 2017. Unlisted real estate

ACQUISITIONS

Location Purchase amount Interest

Washington, D.C.:

• 900 16th Street
• 1101 New York Avenue NW

74.0 million dollars 190.8 million dollars 49% Berlin: Axel-Springer-Str. and Zimmerstr. 425 million euro 100% Paris: 6-8 Boulevard Haussmann 462.2 million euro 100% New York: 375 Hudson Street 223 million dollars 48% London: 20 Air Street 112.5 million pounds 25%

New Chief Investment Officers

From 1 September 2017

Chief Investment Officer US Per Løken Chief Investment Officer Europe Romain Veber

Ow nership activities

Third quarter 2017

18

• We took part in a number of consultations on standards and principles
• We sent our new expectations document on tax and transparency to the 500

largest companies in the portfolio

• We voted at 1,277 general meetings on a total of 10,462 proposals in the

third quarter

Highlights

• The fund returned 3,2 percent in third quarter 2017
• The market value of the fund decreased by 68 billion kroner to 7,952 billion kroner
• At the end of the quarter, the fund was invested as follows:
• Equity investments

65.9 percent

• Fixed-income investments

31.6 percent

• Unlisted real estate investments

2.5 percent

• The return on the fund was 0.1 percentage point higher than the return on the

benchmark index

19

GOVERNMENT PENSION FUND GLOBAL

THIRD QUARTER 2017

27 OCTOBER 2017