U.S. Big Tech Gives Norway SWF Boost for 2020

Posted on 01/28/2021


In 2020, Norway Government Pension Fund Global returned 10.86%, or 1,070 billion kroner. The return on the fund’s equity investments was 12.1%. Investments in unlisted real estate returned -0.1%, whereas the return on the fixed income investments was 7.5%. The fund’s overall return was 0.27 percentage points higher than the return on the benchmark index. The fund had a value of 10,914 billion kroner as at December 31, 2020, of which 72.8% was invested in equities, 2.5% in unlisted real estate, and 24.7% in fixed income. In 2020, 298 billion kroner was withdrawn from the fund. Norway’s SWF has around US$ 927 billion in listed equities at the end of 2020.

“Despite the pandemic having put its mark on 2020, it has been yet another good year for the fund. The fund’s overall return in 2020 was the second highest since 1998 measured in kroner. However, the high return also reminds us that the market value of the fund might vary a lot going forward, says Chair of the Executive Board Øystein Olsen.

The outbreak and spread of the coronavirus at the beginning of the year had major consequences for the markets.

“The market fell sharply in the first quarter, before quickly recovering in the second quarter. The whole year has been characterised by major fluctuations in the market, and big differences between different sectors, says CEO of Norges Bank Investment Management Nicolai Tangen.

On the equity side, U.S. technology companies in particular made a positive contribution to the return.

According to SWFI’s Global Asset Owner Survey, the most crowded trade for a series of survey was long U.S. technology stocks. The survey is answered by sovereign wealth funds, pensions, and other institutional investors (non-asset managers).

Top 10 Single Contribution to Absolute Return in Equities in Kroner (rounded)
1. Apple Inc., 84,000,000,000
2. Amazon.com, Inc., 51,000,000,000
3. Microsoft Corporation, 41,000,000,000
4. Tesla Inc. 36,000,000,000
5. TSMC, 27,000,000,000
6. Alphabet (Google), 21,000,000,000
7. Samsung Electronics, 20,000,000,000
8. Tencent Holdings Limited, 17,000,000,000
9. ASML, 15,000,000,000
10. NVIDIA, 14,000,000,000
Source: Norges Bank Investment Management.

“Technology companies had the highest return in 2020, with a return of 41.9 percent. This is mainly due to the pandemic resulting in a massive increase in the demand for products for online working, education, trade and entertainment”, Tangen says in a press release.

Fund Management Costs

Costs – Millions NOK 2020 2019
Personnel costs 1,408 1,448
Other internal costs 1,887 1,962
External management costs 2,010 902
Management costs 5,305 4,312

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