Norway’s USD1.1 trillion fund earns record USD180b last year while GIC won’t provide annual returns

It was reported yesterday (27 Feb) that Norway’s sovereign wealth fund made a 19.9% return on investment last year, earning a record 1.69 trillion Norwegian crowns (US$180 billion).

The US$1.1 trillion fund’s return for the year was stronger than that of its benchmark index, it added. “2019 has been a very good year for the fund … this is the greatest increase in value in a single year in the fund’s history,” said Norwegian central bank Governor Oeystein Olsen, who chairs the fund’s board.

Last year’s fantastic return on investment amounted to almost US$34,000 for each of its 5.3 million people living in Norway, and the overall value of the fund is now equivalent to about US$207,000 for every Norwegian citizens.

The fund invests in equity, bonds and real estate. It is now worth three times Norway’s annual GDP, and its returns provide vital funding for the country’s extensive social welfare programmes.

The CEO of the fund, Yngve Slyngstad, commented that Norway had moved from being “an oil nation to an oil fund nation”. He added that Norway now received more money in government coffers from the fund rather than oil in the North Sea.

“This is the second chapter. I think the first chapter was taking oil from the North Sea, and we executed that in a reasonably prudent fashion. Now it’s the second leg, and that is trying to manage those funds as smoothly as possible and so far it’s been quite adequately executed as well,” he said.

During Slyngstad’s tenure, the fund’s assets have increased five-fold.

Singapore’s sovereign wealth fund keeps things secret

In the case of Singapore’s sovereign wealth fund GIC, it does not provide one-year returns. According to its website, GIC said one-year returns are “too short term in relation to GIC’s 20-year investment horizon”.

But it publishes 5-year and 10-year nominal rates of returns “in USD terms to reflect the ongoing medium-term investment performance of the portfolio. However, it does not publish the real rates of return.

It also does not disclose the size of the assets under its management, unlike the Norway’s sovereign wealth fund which now holds US$1.1 trillion worth of assets.

“The Government has explained that revealing the assets under management of GIC will, taken together with the published assets of MAS and Temasek, amount to publishing the full size of Singapore’s financial reserves,” it said.

“It is not in the national interest to publish the full size of the reserves for it will make it easier for markets to mount speculative attacks on the Singapore Dollar during periods of vulnerability.”

Strangely, the Norwegian government doesn’t seem to have such fears in speculators attacking its kroner (kr).


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