GOVERNMENT PENSION FUND GLOBAL ANNUAL REPORT PRESS CONFERENCE 28 FEBRUARY 2014

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1 213 GOVERNMENT PENSION FUND GLOBAL ANNUAL REPORT PRESS CONFERENCE 28 FEBRUARY 214

2 Market value Billions of kroner ,38 5 Real estate investments 4 3,816 4 Fixed-income investments 3 3 Equity investments Source: Norges Bank Investment Management

3 Annual inflows Billions of kroner Inflows Average ten last years Source: Norges Bank Investment Management

4 Inflows and return Billions of kroner Return Inflows Source: Norges Bank Investment Management

5 Changes in the fund s market value Billions of kroner Return Krone rate Inflows Source: Norges Bank Investment Management

6 Changes in the fund s market value Billions of kroner 1, Return Krone rate Inflows Total Source: Norges Bank Investment Management

7 Annual return Percent Annual return 1 1 Accumulated annualised return Source: Norges Bank Investment Management

8 Accumulated annualised return Annualised nominal (real)return since Percent USD (nominell (nominal avkastning) return) ,7 5, Currency basket Valutakurven (nominal return) (nominell avkastning) Currency basket Valutakurven (net real return) (netto real avkastning) 2 3, Source: Norges Bank Investment Management

9 Annual excess return Percentage points Annual relative return Accumulated annualised relative return Source: Norges Bank Investment Management

10 Changes in value since 1996 Billions of kroner Market value of the fund 5,38 3,816 Gross inflow of new capital 3,32 3,6 Management costs Changes due to fluctuations in krone Accumulated return 1,799 1,17 Equity 1, Fixed income Real estate 5 1

11 Key figures Measured in the fund s international currency basket. Percent. 213 Last 1 years Since Gross annual return on fund Annual price inflation Annual management costs Annual net real return on fund

12 The fund s asset allocation Percent 7% 7% 6% 61.2 % 61.7 % 6% 31/12/212 31/12/213 5% 5% 4% 38.1 % 37.3 % 4% 3% 3% 2% 2% 1% 1% %.7 % 1. % Equity Fixed income Real estate % 12 Source: Norges Bank Investment Management

13 Developments in equity markets Measured in USD (Stoxx in EUR). Indexed ( = 1) FTSE Global All Cap (global) S&P 5 (US) Stoxx Europe 6 (Europe) MSCI Asia Pacific (Asia) 8 FTSE Global S&P 5 All Cap (global) (US) Stoxx Europe 6 (Europe) MSCI Asia Pacific (Asia) Q % 1 % 6 % 2 % % 3 % 17 % 9 % 7 7 jan. 12 jul. 12 jan. 13 jul. 13 jan Source: Bloomberg

14 Developments in emerging markets Measured in USD. Indexed ( = 1) S&P 5 FTSE EM MSCI EM S&P 5 FTSE EM MSCI EM Q % 1 % 1 % % -5 % -6 % 8 8 jan. 12 jul. 12 jan. 13 jul. 13 jan Source: Bloomberg

15 Market development in stock sectors FTSE Global All Cap-index. Measured in USD. ( = 1) Healthcare Consumer services Industrials Oil & gas Utilities Healthcare Consumer services Industrials Oil and gas Utilities Basic materials Q % 8 % 9 % 6 % 2 % 5 % % 34 % 31 % 15 % 12 % -1 % 6 6 jan. 12 jul. 12 jan. 13 jul. 13 jan Basic materials

16 Market development for bonds Barclays Global Aggregate Index. Measured in local currency. ( = 1) Dollar Euro Pound Yen 9 Dollar Euro Pound Yen Q4 213 % 1 % -1 % % % 2 % -3 % 2 % jan. 12 jul. 12 jan. 13 jul. 13 jan Source: Barclays Capital

17 Market development for bonds Measured in USD. Indexed ( = 1) Government bonds Governmentrelated bonds Corporate bonds 95 9 Government bonds Governmentrelated bonds Corporate bonds Inflationlinked bonds Securitised debt 95 9 Inflation-linked bonds Securitised debt Q % % 1 % % % % -3 % % -3 % % jan. 12 jul. 12 jan. 13 jul. 13 jan Source: Barclays Capital

18 1-year government bond yields Percent UK USA Japan Germany USA Germany UK Japan 31 Dec 212 1,76 1,31 1,83,79 31 Dec 213 3,3 1,93 3,2,74 jan. 6 jan. 7 jan. 8 jan. 9 jan. 1 jan. 11 jan. 12 jan. 13 jan Source: Bloomberg

19 Real interest rate in government bond markets Barclays Capital Index 4% 4% 3% 2% 3% 2% UK US Germany 1% 1% 19 % UK US Germany 31 Dec 212 -,1 % -,44 % -,76 % 31 Dec 213,2 %,8 %,6 % -1% -1% jan. 6 jan. 7 jan. 8 jan. 9 jan. 1 jan. 11 jan. 12 jan. 13 jan. 14 % Source: Barclays Capital

20 2 The fund s investments Investments in 82 countries and 44 currencies

21 Real estate investments Billions of kroner Source: Norges Bank Investment Management

22 Real estate investments per By country and sector. Percent Germany 8.5 % Rest of Europe 9.6 % UK 27. % Logistics 18.7% Other* 1.7% Office 62.4% Switzerland 13.8 % Retail 17.1% France 22.5 % USA 18.7 % 22 Source: Norges Bank Investment Management * Include other sectors net non-allocated posts

Active ownership Development of international standards

Reporting Council Dialogue with CDP Water Disclosure on

Business impact on tropical forests Need for structured

Rainforest Foundation Norway Industry initiative:

Dialogue with International Council on Mining and Metals

23 Active ownership Development of international standards Corporate disclosure Letter to International Integrated Reporting Council Dialogue with CDP Water Disclosure on disclosure of water related risk Industry initiative: Business impact on tropical forests Need for structured information for investors Cooperation with the Rainforest Foundation Norway Industry initiative: «Conflict free» metals Need for industry standard Dialogue with International Council on Mining and Metals UNICEF Children s rights and business principles NBIM participates in working group 23

24 Active ownership Strengthened role as owner in 213 Closer contact with boards For the first time we took the opportunity to become a member of a nomination committee Corporate Governance Advisory Board established 24

25 Active ownership Company dialogue 213 Chairman, board member 7% Group meeting 746 IR 29% CFO 33% One-onone 1558 CEO 31% 25 Integrated part of the investment process 2,34 company meetings in 213, typically with a broad agenda With 95 companies the dialogue was predominantly on corporate governance, environmental or social issues Source: Norges Bank Investment Management

26 Active ownership NBIM voting for or against a board recommendation Shareholder proposal Anti-takeover related Reorganisation and mergers Capitalisation Non-salary compensation For Against Directors related Routine/business % 1% 2% 3% 4% 5% 6% 26 NBIM voted on approximately 93, resolutions in % percent of resolutions proposed by the board 2.8% percent of resolutions proposed by shareholders Source: Norges Bank Investment Management

27 Divestments within certain sectors In 213 we continued to divest from companies where we assessed the business model not to be sustainable in the long term Certain sectors in some regions considered to have elevated risk Gold mining Coal mining in Indonesia Palm oil production Number of companies Other 11 Mining 27 Palm oil Source: Norges Bank Investment Management

Environmental investments 31.12.213, 31.

28 Environmental investments , 31.4 billion kroner invested in 166 companies Source: NBIM, FTSE classification

29 Management costs Percent.16%.16%.14%.12%.14%.12% Management costs.1%.8%.6%.7%.1%.8%.6% Management costs excluding performance-based fees.4%.5%.4%.2%.2%.% % 29 Source: Norges Bank Investment Management

30 Published on web 28 February 214 Holding lists Voting records GIPS report Significant external suppliers External managers Monthly returns 3

31 Highlights 213 Return of 15,9 prosent in 213 Equity investments: 26.3 percent Fixed-income investments:.1 percent Real estate investments: 11.8 percent Excess return 1. percentage point The fund s market value grew by 1,222 billion kroner to 5,38 billion kroner. The fund s asset allocation at the end of the year: Equity investments: 61.7 percent Fixed-income investments: 37.3 percent Real estate investments: 1. percent 31

32 213 GOVERNMENT PENSION FUND GLOBAL ANNUAL REPORT PRESS CONFERENCE 28 FEBRUARY 214

PRESS CONFERENCE 2 November 2012

PRESS CONFERENCE 2 November 2012 PRESS CONFERENCE 2 November 212 3Q 212 Fund s market value Quarterly numbers, 3 September 212. Billions of kroner 4 3 5 Asset class Value Percentage fund Equities 2 247 6.3% 3 723 4 3 5 3 Fixed Income