government pension fund global...usd, stoxx europe 600 in eur). indexed total return (31.12.2018 =...
TRANSCRIPT
Government
Pension Fund
Global
First half 2020
Oslo, 18 August 2020
Marked value increased to 10,400 billion kronerBillions of kroner. As at 30.09.2019
2
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
10 11 12 13 14 15 16 17 18 19 20
Fixed income
Real Estate
Equity
Value Percentage share
Equity investments 7,234 69.6
Unlisted real estate investments 295 2.8
Fixed-income investments 2,871 27.6
Fund 10,400 100
Source: Norges Bank Investment Management
-1,400
-1,000
-600
-200
200
600
1,000
1,400
-1,400
-1,000
-600
-200
200
600
1,000
1,400
Q2 2020 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Krone rate
Return
Inflow/withdrawal
Total
-188 billions kroner in return first halfBillions of kroner
3
1H 2020
Return - 188
Inflow/outflow - 172
Krone rate 672
Total 312
Source: Norges Bank Investment Management
- 3.4 percent return first halfMeasured in the fund’s currency basket. Quarterly return. Percent
4
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
09 10 11 12 13 14 15 16 17 18 19
Source: Norges Bank Investment Management
20
Strongest return for fixed incomeMeasured in the fund’s currency basket. Percent
5
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
Q2 2020 Q3 2020 Q4 2020 Q1 2020 Q2 2020
Equity investments
Real estate investments
Fixed-income investments
Source: Norges Bank Investment Management
1H 2020
Equity investments - 6.8%
Unlisted real estate investments - 1.6%
Fixed-income investments 5.1%
- 0.11 percent in relative returnHalf year return relative to reference index. Percentage points
6
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
09 11 13 15 17 19
Equity and fixed-income investments until end of 2016.
Source: Norges Bank Investment Management
Changes in value since 1996Billions of kroner
7
30.06.2020 31.12.2019
Total inflow of capital* 3,220 3,389
Total return on fund 5,170 5,358
Total management fees -51 -48
Changes due to fluctuations in krone 2,062 1,390
Market value of the fund 10,400 10,088
Source: Norges Bank Investment Management
*Total inflow of capital is adjusted for accrued, not paid, management fees.
Key figures per first halfMeasured in the fund’s currency basket. Annualised. Percent
8
Since 1.1.1998 Last 10 years
Return on fund 5.79 7.64
Annual inflation 1.73 1.60
Annual management costs 0.08 0.06
Annual net real return on fund 3.90 5.88
Source: Norges Bank Investment Management
50
60
70
80
90
100
110
50
60
70
80
90
100
110
Aug-19 Nov-19 Feb-20 May-20 Aug-20
FTSE Global All Cap index*
Equity part of the fund'sbenchmark index
S&P 500 (US)
Stoxx Europe 600 (Europe)
MSCI Asia Pacific (Asia)
Developments in equity marketsMeasured 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)
9Source: Bloomberg
* Excluding Norway
FTSE Global
All Cap index*
Equity part of the fund’s
benchmark index S&P 500
Stoxx
Europe 600
MSCI Asia
Pacific
First half 2020 -5.6% -6.6% -3.1% -11.7% -6.2%
2019 26.7% 25.7% 31.5% 27.9% 19.9%
10-year government bond yieldsPercent
10
-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
Aug-19 Nov-19 Feb-20 May-20 Aug-20
US
Italy
UK
Spain
Japan
Germany
Source: Bloomberg
US Italy UK Spain Japan Germany
31.06.2020 0.66% 1.26% 0.17% 0.46% 0.02% -0.46%
31.12.2019 1.92% 1.41% 0.82% 0.46% -0.02% -0.19%
Withdrawals from the fundBillion kroner. Months
11
-70
-60
-50
-40
-30
-20
-10
0
10
-70
-60
-50
-40
-30
-20
-10
0
10
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
0
10
20
30
40
50
60
70
80
90
100
0
10
20
30
40
50
60
70
80
90
100
Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20
Asset class weights in reference indexPercent
12
Fixed-income weight
Equity weight
Real estate acquisitionsAnnounced in the first half of 2020. Unlisted real estate
13
Location Sector Purchase price Share
Otemachi Park Building, Marunouchi, Tokyo Office 79.7 billion JPY 39.9 percent
ACQUISITION
Peak season for voting
▪ We voted at 92,933 proposals at 8,364 meetings
▪ We further increased transparency about how we exercise our ownership rights
by providing explanations for all votes against the board’s recommendation
First half 2020
14
Our positionsFirst half 2020
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Observations and exclusions
▪ Excluded 12 companies, Revoked exclusion of three companies and put four
companies under observation
• Coal: 5 companies excludet, 4 companies to observation
• Conduct-based climate criterion: 4 companies excluded
• Severe environmental damage: 2 companies excluded
• Violations of human rights: 1 company excluded
Announced in first half 2020
16
Highlights
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▪ The market value of the fund increased by 312 billion kroner to 10,400 billion kroner
▪ The fund returned -3.4 percent in first half of 2020
▪ The return on the fund was 0.11 percentage point higher than the return on the
reference index
▪ At the end of the half year, the fund was invested as follows:
• Equity investments 69.6 percent
• Unlisted real estate investments 2.8 percent
• Fixed-income investments 28.2 percent
Government
Pension Fund
Global
First half 2020
Oslo, 18 August 2020