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OSLO - NORWAY'S state pension fund, one of the world's biggest investors, lost US$90.5 billion last year on its portfolio, wiping out nearly a decade of returns, the central bank said on Wednesday.
The negative return of 23.3 per cent is the worst result since the fund was created in the early 1990s and wiped out almost all the gains it made in the past decade.
Norway's 'oil fund,' invested in international stock and bond markets, was hit hit badly by the financial crisis that emerged fully in the fourth quarter, the central bank said.
'The crisis on the financial markets heavily impacted the fund,' central bank governor Svein Gjedrem told reporters. 'There was no place to hide,' he added.
The fund contains nearly all state revenues from the oil industry in Norway, one of the world's largest oil and gas exporters, and was created to help finance its generous welfare state system once the wells run dry.
Despite the loss on the investment portfolio, the fund's overall value rose 256 billion kroner to 2.275 trillion kroner by the end of 2008. The increase reflected the inflow of a record 384 billion kroner of oil and gas revenue throughout the year, and a weakening of the kroner.
Oil and gas earnings are predominantly in dollars and the fund only invests in stock markets abroad so a weakening of the Norwegian currency automatically increases its value.
The fund was hit hard by the pronounced falls on world stock markets at the end of the year, a time when the fund was in the process of raising from 40 to 60 per cent the proportion of its assets invested in shares. Shares currently account for about 50 per cent of total investments.
The oil fund is one of the world's biggest investors, with holdings in about 7,900 companies.
At the end of the year, it held the equivalent of 0.77 per cent of the world's total stock market capitalisation and 1.33 percent in Europe, making it the biggest single investor on the continent. -- AFP
The negative return of 23.3 per cent is the worst result since the fund was created in the early 1990s and wiped out almost all the gains it made in the past decade.
Norway's 'oil fund,' invested in international stock and bond markets, was hit hit badly by the financial crisis that emerged fully in the fourth quarter, the central bank said.
'The crisis on the financial markets heavily impacted the fund,' central bank governor Svein Gjedrem told reporters. 'There was no place to hide,' he added.
The fund contains nearly all state revenues from the oil industry in Norway, one of the world's largest oil and gas exporters, and was created to help finance its generous welfare state system once the wells run dry.
Despite the loss on the investment portfolio, the fund's overall value rose 256 billion kroner to 2.275 trillion kroner by the end of 2008. The increase reflected the inflow of a record 384 billion kroner of oil and gas revenue throughout the year, and a weakening of the kroner.
Oil and gas earnings are predominantly in dollars and the fund only invests in stock markets abroad so a weakening of the Norwegian currency automatically increases its value.
The fund was hit hard by the pronounced falls on world stock markets at the end of the year, a time when the fund was in the process of raising from 40 to 60 per cent the proportion of its assets invested in shares. Shares currently account for about 50 per cent of total investments.
The oil fund is one of the world's biggest investors, with holdings in about 7,900 companies.
At the end of the year, it held the equivalent of 0.77 per cent of the world's total stock market capitalisation and 1.33 percent in Europe, making it the biggest single investor on the continent. -- AFP
