Speakingout: Yngve Slyngstad
Zero return for Norway oil fund
Norway's sovereign wealth fund, the oil fund, has had roughly a zero percent return on its investments in global stocks and bonds so far this year, its executive director said today.
"Markets were very weak in January, so the portfolio dropped further, but markets picked up and total returns are at around zero percent so far this year," Reuters quoted Yngve Slyngstad telling a hearing at the Norwegian parliament.
The $300-billion-plus investment vehicle is under increasing scrutiny in Norway after reporting a negative return of 23.3% on investments last year and missing its benchmark portfolio by 3.4 percentage points.
At the hearing, Finance Minister Kristin Halvorsen reiterated that she may strip the fund of some active management roles as part of an ongoing government review of strategy triggered by its nearly $100 billion investment losses in 2008.
The strategy review is meant to limit risks at the fund, fuelled by Norway's oil and gas revenues and run by the central bank.
"Few can say that I am a sworn fan of so-called 'active management', whose success is hard to prove and which is often tied to big bonuses ... But it would be wrong to halt all active management overnight," she said.
Svein Gjedrem, the governor of Norway's central bank, Norges Bank, repeated his view that the fund should stick with active management, instead of adopting a more index-based investments approach which would basically let it buy the stock index.
Norway's oil fund is Europe's biggest equity investor.