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

GOVERNMENT PENSION FUND GLOBAL THIRD QUARTER 2017 27 OCTOBER 2017

Market value at 7,952 billion Billions of kroner. As at 30.09.2017 8,000 8,000 Value Percentage share Equity investments 5,242 65.9 7,000 7,000 Fixed-income 2,511 31.6 investments 6,000 6,000 Unlisted real estate 199 2.5 Real estate investments investments 5,000 5,000 Fixed-income investments 4,000 4,000 3,000 3,000 Equity investments 2,000 2,000 1,000 1,000 0 0 07 08 09 10 11 12 13 14 15 16 17 2 Source: Norges Bank Investment Management

Tuesday 19 September 2017 at 02:01 CET: $ 1,000,000,000,000 3

Withdraw al from the fund Billions of kroner 60 60 50 50 41 40 40 Withdrawal 30 30 20 20 Average quarterly 10 10 inflow last 10 years 0 0 -10 -10 -10 -20 -20 -30 -30 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4 Source: Norges Bank Investment Management

Quarterly change in market value Billions of kroner 500 500 400 400 300 300 200 200 Return 100 100 0 0 Withdrawal -100 -100 3Q 2017 -200 -200 Return 192 Withdrawal -10 -300 -300 -400 -400 -500 -500 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 5 Source: Norges Bank Investment Management

Currency effect decreased market value Billions of kroner 500 500 400 400 300 300 Krone rate 200 200 100 100 Return 0 0 Withdrawal -100 -100 Total 3Q 2017 -200 -200 Return 192 Withdrawal -10 -300 -300 Krone rate -250 Total -68 -400 -400 -500 -500 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 6 Source: Norges Bank Investment Management

Positive return at 3.2 percent Measured in the fund’s currency basket. Quarterly return. Percent 15 15 10 10 5 5 3.2 0 0 -5 -5 -10 -10 -15 -15 07 08 09 10 11 12 13 14 15 16 17 7 Source: Norges Bank Investment Management

Positive return in all asset classes Measured in the fund’s currency basket. Percent 8 8 6 6 4 4 Equity investments 2 2 Fixed-income investments 0 0 Real estate investments -2 -2 3Q 2017 Equity investments 4.3 % -4 -4 Fixed-income investments 0.8 % Real estate investments (unlisted) 2.7 % Total 3.2 % -6 -6 -8 -8 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 8 Source: Norges Bank Investment Management

Fund relative return Percentage points 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.10 0.5 0.5 0.0 0.0 -0.5 -0.5 -1.0 -1.0 -1.5 -1.5 -2.0 -2.0 -2.5 -2.5 07 08 09 10 11 12 13 14 15 16 17 9 Equity and fixed-income investments until 2016. Source: Norges Bank Investment Management

Changes in value since 1996 Billions of kroner 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 10 Source: Norges Bank Investment Management

Historical key figures Measured in the currency basket. Annualised. Percent 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 11 Source: Norges Bank Investment Management

Developments in equity markets Measured in USD (Stoxx in EUR). Indexed total return (31.12.2016 = 100) 130 130 FTSE S&P 500 Stoxx MSCI Global All Europe Asia Cap 600 Pacific 120 120 3Q 2017 5.3 % 4.5 % 2.7 % 5.2 % FTSE Global All Cap (global) Year to date 17.4 % 14.2 % 10.5 % 21.9 % 110 110 Stoxx Europe 600 (Europe) 100 100 MSCI Asia Pacific (Asia) 90 90 S&P 500 (USA) 80 80 70 70 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 12 Source: Bloomberg

Developments in equity sectors Measured in USD. Indexed total return (31.12.2016 = 100) 130 130 120 120 Technology 110 110 Industrials 100 100 Basic materials 90 90 Consumer services 80 80 Basic Consumer Technology Industrials Oil and gas materials services 70 70 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 % 60 60 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 13 Source: FTSE

Development for bonds Measured in local currency. Indexed total return (31.12.2016 = 100) 110 110 105 105 Dollar Euro 100 100 Pound Yen Dollar Euro Pound Yen 95 95 3Q 2017 0.9 % 0.7 % -0.3 % 0.1 % Year to date 3.3 % 0.1 % 0.5 % -0.2 % 90 90 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 14 Source: Bloomberg Barclays Indices

Development for bond sectors Measured in USD. Indexed total return (31.12.2016 = 100) 115 115 Government bonds 110 110 Government-related 105 105 bonds Inflation-linked bonds 100 100 Corporate bonds 95 95 Government Government- Inflation- Corporate Securitised bonds related bonds linked bonds bonds bonds Securitised bonds 3Q 2017 1.6 % 2.3 % 2.2 % 2.2 % 1.4 % 90 90 Year to 6.1 % 7.7 % 5.7 % 7.5 % 3.9 % date 85 85 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 15 Source: Bloomberg Barclays Indices

New real estate acquisitions Third quarter 2017. Unlisted real estate ACQUISITIONS Location Purchase amount Interest Washington, D.C.: 900 16 th Street • 74.0 million dollars 49% • 1101 New York Avenue NW 190.8 million dollars 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% 16

New Chief Investment Officers From 1 September 2017 Chief Investment Officer US Chief Investment Officer Europe Per Løken Romain Veber

Ow nership activities Third quarter 2017  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 18

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