Norway’s Sovereign Wealth Fund Grew by $37 Billion in First Quarter

Norway’s $728 billion Government Pension Fund Global, the largest sovereign wealth fund in the world, grew by 219 billion kroner ($37 billion) during the first quarter of 2013, due to unprecedented stimulus from central banks trying to boost economic growth.

The fun, which generates money from taxes on oil and gas, ownership of petroleum fields, and the government’s 67% stake in Statoil ASA, experienced returns of 5.4 percent over the first three months of the year, with stocks returning 8.3 percent, and bond investments climbing 1.1 percent.

Yngve Slyngstad, the Chief Executive Officer of Norges Bank Investment Management, said that “the favorable performance reflects the strong push in equity markets, particularly in January and February. Among the major stock markets, the U.S. and Japanese markets made the largest contributions.”

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Policy makers in Washington and Tokyo have already injected money into the struggling economies by buying bonds, and the European Central Bank has announced a similar plan for the near future. This boost to financial systems has allowed the stock markets to rally, with the MSCI World Index building on last year’s 13.2 percent growth with a nine percent gain so far this year. The US benchmark Standard and Poor’s 500 Index has also jumped to a record during the first quarter.

The fund had its biggest year ever in 2012, refocusing its strategy to capture more global growth by moving asset allocation away from Europe and into emerging markets in Asia and South America, whose contribution to international markets is growing.

By the end of 2012 holdings in emerging market debt had increased in areas such as Mexico’s government bonds, Colombian fixed income assets, and other equities in Kuwait and Oman; all growing influences in the energy markets.

Yngve Slyngstad confirmed that he sees “an increase in investments in emerging markets and their currencies to a significant degree over the next 10 years.”