Norwayâ€™s sovereign wealth fund, the worldâ€™s biggest, hasnâ€™t been part of a global selloff in stocks this quarter, according to its chief executive officer, Yngve Slyngstad.
â€œWe have not been participating in the selling, and we donâ€™t foreseeâ€ that a change of strategy will be necessary, Slyngstad said at a presentation of the fundâ€™s 2015 results on Wednesday. The comments follow evidence that wealth funds across the Middle East and central Asia have sold assets to plug deficits amid plunging oil prices.
Speculation that petrodollar-stocked wealth funds were exiting assets has fed into market turmoil as stocks sank this quarter. The $830 billion Government Pension Fund Global returned 2.7 percent in 2015, its worst result in half a decade, after rising 7.6 percent the previous year.
Stocks gained 3.8 percent, bonds rose 0.3 percent, and real estate investments grew 10 percent. The fundâ€™s holdings overall gained 334 billion kroner ($39 billion) last year.
Slyngstad characterized 2015 as â€œa volatile year, with negative interest rates, currency turmoil, falling oil prices and weaker growth expectations for emerging markets.â€ Returns were helped by the fact that the fund â€œmade fewer, but larger real estate investments,â€ he said.
Still, the fund managed to bounce back from two consecutive quarters of losses, catching a stock rally at the end of 2015 as it raised stakes in equities and sold off bonds. These gains were most likely erased this year amid renewed equity market unrest and as the oil-dependent Norwegian government made its first ever withdrawals. Central bank Governor Oeystein Olsen and Slyngstad estimate that the government may withdraw 80 billion kroner from the fund this year and that 2015 may have been the last year with net inflows to the fund.