The Associated Press March 5, 2010, 5:06AM ET

Norway oil wealth fund has best year ever in 2009

Norway's vast fund for oil wealth posted a 25.6 percent return on investment for 2009 -- its best ever -- as international markets recovered from the global financial crunch, the central bank said Friday.

Norges Bank reported that the fund gained 613 billion kroner ($103.4 billion) on investments. That's the best result since Norway established the sovereign wealth fund in 1996 to invest surplus oil revenue abroad and avoid overheating its domestic economy.

The Government Pension Fund-Global, commonly referred to as the oil fund, grew 16 percent during 2009 to 2.64 trillion kroner ($445.3 billion) from 2.28 trillion kroner in 2008, when the fund posted its worst result ever -- a loss of 23 percent. A strong krone reduced the fund's market value, Norges Bank said.

Yngve Slyngstad, the fund's senior manager, attributed this year's result to improvements in international markets, in particular "the fixed income markets that stopped working during the financial crisis."

"Developments in 2009 must, in the same way as 2008, to a large extent be viewed in light of the financial crisis. The fund's long-term management strategy ensured that we got through this period in a good way," said Slyngstad.

At the end of 2009, the fund's average holding in international equity markets was 1 percent and 1.8 percent in European markets. Slyngstad has said that Norway's oil fund is probably the largest equity investor in Europe.

The fund typically invests about 60 percent of its capital in more than 7,000 publicly traded companies worldwide, with the remainder in government-backed bonds.

Norway, with a population of 4.8 million people, is a major oil and gas exporter.


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