OSLO--Norway's oil fund, the world's biggest sovereign wealth
fund, reported a 0.1% profit on its investments in the third
quarter, as a loss on its equity investments was offset by a
fixed-income gain, and said geopolitical uncertainty was hurting
European stocks while U.S. stocks gained.
Norges Bank Investment Management, the arm of the central bank
that manages the fund, said Wednesday that earnings on its
investments totaled 15 billion Norwegian kroner ($2.27 billion).
The total value of the fund on September 30 was NOK5.534
trillion.
Equity investments lost 0.5% in the third quarter, while
fixed-income investments gained 0.9%, NBIM said. U.S. shares
contributed positively, while European shares contributed
negatively, NBIM said.
"Two quarters of strong returns were followed by a virtually
flat quarter," said NBIM Chief Executive Officer Yngve Slyngstad.
"Increased geopolitical uncertainty in the vicinity of the euro
area contributed to a negative return on European stocks. The U.S.,
on the other hand, emerged as the global growth engine, and U.S.
stocks produced a positive return," he added.
Health-care and technology stocks were the best performers, NBIM
said. The weakest performers were oil and gas companies, amid a
sharp drop in oil prices. Among individual stocks, technology
companies Apple and Microsoft and drugmaker Novartis contributed
the most to the fund's third-quarter earnings. The most negative
contribution came from retailer Tesco, chemical company BASF and
carmaker Daimler.
The management said the oil fund, also known as the Government
Pension Fund Global, had increased its holdings of bonds issued by
Japan, India and Austria, and decreased its holdings of bonds
issued by the U.S., France and Germany.
Some 78.6% of fixed income investments at the end of the quarter
were denominated in dollars, euros, yen and sterling, compared with
77.8% at the end of the second quarter, the fund said.
Around 61.4% of the fund's investments were in equities, 37.3%
in fixed income assets and 1.3% in real estate at the end of the
quarter.
The krone weakened against many of the main currencies during
the quarter, increasing the fund's value by NOK5 billion. The
government transferred NOK36 billion in new capital to the
fund.
The Norwegian oil fund was set up in the 1990s to act as the
main investment vehicle for Norway's vast oil wealth. It has
expanded more than 10-fold in the past decade and is expected to be
worth NOK7.533 trillion by 2020.
Write to Kjetil Malkenes Hovland at
kjetilmalkenes.hovland@wsj.com
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