Government Pension Fund Global Annual report 2019 Oslo, 27 - - PowerPoint PPT Presentation

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Government Pension Fund Global Annual report 2019 Oslo, 27 - - PowerPoint PPT Presentation

May 27, 2023 37 likes •320 views

Government Pension Fund Global Annual report 2019 Oslo, 27 February 2020 10,088 billion kroner in the fund Market value as at 31.12.2019. Billions of kroner 12,000 12,000 Value Percentage share 10,088 Equity investments 7,145 70.8

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Government Pension Fund Global

Annual report 2019

Oslo, 27 February 2020

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SLIDE 2

10,088 billion kroner in the fund

Market value as at 31.12.2019. Billions of kroner

2 2,000 4,000 6,000 8,000 10,000 12,000 2,000 4,000 6,000 8,000 10,000 12,000 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Fixed income Unlisted real estate Equity

10,088

Value Percentage share Equity investments 7,145 70.8 Unlisted real estate investments 273 2.7 Fixed-income investments 2,670 26.5

2

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SLIDE 3

19.9 percent return in 2019

Measured in the fund’s currency basket. Percent

3

  • 30
  • 20
  • 10

10 20 30

  • 30
  • 20
  • 10

10 20 30 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Annual return Accumulated annualised return since 1998

6.1% 19.9%

4Q 2019 5.1% 2019 19.9% Since 1998 6.1%

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SLIDE 4
  • 50
  • 40
  • 30
  • 20
  • 10

10 20 30 40 50

  • 50
  • 40
  • 30
  • 20
  • 10

10 20 30 40 50 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Equity Unlisted real estate Fixed income

26 percent in equity return in 2019

Measured in the fund’s currency basket. Percent

4

2018 2019 Equity investments

  • 9.5%

26.0% Fixed-income investments 0.6% 7.6% Unlisted real estate investments 7.5% 6.8% Fund

  • 6.1%

19.9%

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SLIDE 5

5,358 billion kroner in total return

As at 31.12.2019. Billions of kroner

5

3,341 5,358 1,390

  • 1,000

1,000 3,000 5,000 7,000 9,000 11,000

  • 1,000

1,000 3,000 5,000 7,000 9,000 11,000 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Krone rate Return Inflow (after management costs)

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SLIDE 6

1,692 billion kroner in return in 2019

Billions of kroner

6

  • 1,000
  • 500

500 1,000 1,500 2,000

  • 1,000
  • 500

500 1,000 1,500 2,000 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

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SLIDE 7

The fund’s real return

2019 Last 10 years Since 1.1.1998 Return on fund 19.95 7.83 6.09 Annual inflation 1.80 1.68 1.77 Annual management fees 0.05 0.06 0.08 Annual net real return 17.78 5.98 4.17

Key figures measured in the currency basket. Annualised. Percent

7

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SLIDE 8

243 billion kroner in cash flow

Billions of kroner

8

50 100 150 200 250 50 100 150 200 250 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Fixed income Unlisted real estate Equity

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SLIDE 9

Positive relative return in 2019

Annual relative return of the fund. Percentage points

9

  • 5
  • 4
  • 3
  • 2
  • 1

1 2 3 4 5

  • 5
  • 4
  • 3
  • 2
  • 1

1 2 3 4 5 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Annual relative return Accumulated annualised relative return

4Q 2019 0.22% 2019 0.23% Since 1998 0.25%

0.25% 0.23%

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SLIDE 10

Contribution to relative return

  • Annualised. Percentage points

10

Strategy 2019 Since 2013 Fund allocation

  • 0.12
  • 0.10

Security selection 0.16 0.11 Asset management 0.19 0.18 Total 0.23 0.19

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Value fluctuations in a longer perspective

Percent (left axis) and billion kroner (right axis)

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7.7 779

100 200 300 400 500 600 700 800 900 1,000 5 10 15 20 25 30 35 40 45 50 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Risk measured in percent (left axis) Risk measured in kroner (right axis)

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SLIDE 12

12 50 100 150 200 250 300 350 400

  • 150
  • 100
  • 50

50 100 150 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Equity purchases (left-hand axis) Equity benchmark index (right-hand axis)

Equity purchases and sales

Billions of kroner. Equity benchmark index is indexed total return

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SLIDE 13

Financial markets in 2019

13

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Equity markets in 2019

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

14 90 100 110 120 130 140 90 100 110 120 130 140 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20

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

Source: Bloomberg

FTSE Global All Cap S&P 500 Stoxx Europe 600 MSCI Asia Pacific 4Q 2019 9.2% 9.1% 6.2% 9.5% 2019 27.1% 31.5% 27.7% 19.9%

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SLIDE 15

Equity markets in 2019

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

15 90 100 110 120 130 140 90 100 110 120 130 140 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20

FTSE Global All Cap FTSE Emerging

Source: Bloomberg

FTSE Global All Cap FTSE Emerging 4Q 2019 9.2% 11.8% 2019 27.1% 20.6%

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SLIDE 16

90 100 110 120 130 140 150 90 100 110 120 130 140 150 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20

Technology Industrials Consumer services Telecommunications Oil and gas

Various stock sectors in 2019

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

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Technology Industrials Consumer services Telecommunications Oil and gas 4Q 2019 14.5% 8.8% 7.3% 3.7% 6.4% 2019 44.0% 31.1% 25.9% 17.0% 13.8%

Source: FTSE Russell

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50 100 150 200 250 300 350 400 450 500 50 100 150 200 250 300 350 400 450 500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Technology Health care Consumer services Basic materials Oil and gas

Various stock sectors last ten years

Measured in USD. Indexed total return (31.12.2009 = 100)

17

Technology Health care Consumer services Basic materials Oil and gas 2019 44.0% 23.3% 25.9% 18.5% 13.8% 10 years (annualised) 15.2% 13.3% 12.7% 2.7% 1.5%

Source: FTSE Russell

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SLIDE 18

The fund’s largest equity investments

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31.12.2009 Sector 31.12.2019 Sector HSBC Holdings PLC Financials Apple Inc Technology Royal Dutch Shell PLC Oil and gas Microsoft Corp Technology BP PLC Oil and gas Alphabet Inc Technology Nestlé SA Consumer goods Nestlé SA Consumer goods TOTAL SA Oil and gas Amazon.com Inc Consumer services

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SLIDE 19

10-year government bond yields

Percent

19

  • 1.0
  • 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

  • 1.0
  • 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20

US Germany Japan UK Italy

Source: Bloomberg

US Germany Japan UK Italy 31.12.2018 2.7% 0.2% 0.0% 1.3% 2.7% 31.12.2019 1.9%

  • 0.2%

0.0% 0.8% 1.4%

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Annual investments in unlisted real estate

Completed transactions. Billions of kroner

20 11 15 19 37 44 17 14 7 4

  • 10

10 20 30 40 50

  • 10

10 20 30 40 50 2011 2012 2013 2014 2015 2016 2017 2018 2019

New investments Sales Total amount

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SLIDE 21

Aggregated real estate investments

Billions of kroner

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52 108 181 191 219 246 273 33 54 51 73 81 141 52 141 235 242 291 327 414

50 100 150 200 250 300 350 400 450 50 100 150 200 250 300 350 400 450 2013 2014 2015 2016 2017 2018 2019

Listed real estate investments Unlisted real estate investments

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SLIDE 22

Stable internal management costs

Management costs. Basis points

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4.7 3.7

2 4 6 8 10 12 14 16 2 4 6 8 10 12 14 16 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Management costs Internal management costs

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SLIDE 23

Costs

Millions of kroner

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2019 2018 Personnel costs 1,448 1,262 Other internal costs 1,962 1,885 External management costs 902 1,397 Management costs 4,312 4,544

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Published on our website 27 February 2020

Holdings list Monthly returns Main external service providers Overview of external managers Detailed tables on return and risk Approved issuers of government bonds www.nbim.no

24

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SLIDE 25

25

Upcoming reports

To be published 3 March 2020 To be published 26 March 2020

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SLIDE 26

Public information available on our website

26

▪

Submissions to the Ministry of Finance

Investment advice

▪

Discussion notes

Analyses that may form the basis for the fund’s investment strategy and advice to the Ministry of Finance

▪

Asset manager perspectives

The fund’s views and reflections on issues topical for the financial industry

▪

Expectations documents

The fund’s expectations to companies regarding specific focus areas

▪

Position papers

The fund’s position on specific ownership topics

▪

Public reports

www.nbim.no

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SLIDE 27

Highlights 2019

▪ The return was 19.9 percent in 2019

  • Equity

26.0 percent

  • Unlisted real estate

6.8 percent

  • Fixed income

7.6 percent

▪ The return on the fund was 1,692 billion kroner ▪ The return on the fund was 0.23 percentage point higher than the return on

the benchmark index

▪ The market value of the fund increased to 10,088 billion kroner ▪ Asset allocation at the end of the year

  • Equity

70.8 percent

  • Unlisted real estate

2.7 percent

  • Fixed income

26.5 percent

27

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Government Pension Fund Global

Annual report 2019