Norwegian state pension fund returns up, despite European worries

May 7, 2010, 13:05 GMT

Oslo - Norway's government pension fund Friday reported first-quarter returns of almost 4 per cent even though market concerns over government debt in several European countries had impacted its equity investments.

The market value of the Norwegian Government Pension Fund - Global gained 123 billion kroner (98 billion dollars) during the quarter and was worth some 2.76 trillion kroner at the end of the quarter, officials from Norges Bank said.

'Stock markets in the US and Asia performed better than in Europe, which was held back by concern over high government debt in several countries,' said Yngve Slyngstad, head of Norges Bank Investment Management.

At the end of the quarter, the fund invested about 62.6 percent of its investments in equities of which European stock markets accounted for about 50 per cent.

Greece, Portugal, Spain and Italy accounted for some 12 per cent of the fund's European stock investments at the start of the quarter.

The fund's holdings in government bonds in the four southern European countries was about 55 billion kroner - or about half their corresponding weight in the benchmark portfolio the fund tracks, Slyngstad said.

The Norwegian government via its pension fund invests income from the country's petroleum and gas riches with entities outside of Norway for the country's future health and pension expenditure.