213 GOVERNMENT PENSION FUND GLOBAL ANNUAL REPORT PRESS CONFERENCE 28 FEBRUARY 214
Market value Billions of kroner 6 6 5 5,38 5 Real estate investments 4 3,816 4 Fixed-income investments 3 3 Equity investments 2 2 1 1 4 5 6 7 8 9 1 11 12 13 2 Source: Norges Bank Investment Management
Annual inflows Billions of kroner 12 8 12 8 Inflows Average ten last years 4 248 4 239-4 -4-8 4 5 6 7 8 9 1 11 12 13-8 3 Source: Norges Bank Investment Management
Inflows and return Billions of kroner 12 12 8 4 692 8 4 Return Inflows 239-4 -4-8 4 5 6 7 8 9 1 11 12 13-8 4 Source: Norges Bank Investment Management
Changes in the fund s market value Billions of kroner 12 12 Return 8 692 8 Krone rate Inflows 4 291 4 239-4 -4-8 4 5 6 7 8 9 1 11 12 13-8 5 Source: Norges Bank Investment Management
Changes in the fund s market value Billions of kroner 1,222 12 12 Return 8 692 8 Krone rate Inflows Total 4 291 4 239-4 -4-8 4 5 6 7 8 9 1 11 12 13-8 6 Source: Norges Bank Investment Management
Annual return Percent 3 3 2 2 Annual return 1 1 Accumulated annualised return -1-1 -2-2 -3 4 5 6 7 8 9 1 11 12 13-3 7 Source: Norges Bank Investment Management
Accumulated annualised return Annualised nominal (real)return since 1.1.1998. Percent. 12 12 1 1 USD (nominell (nominal avkastning) return) 8 6 4 6,7 5,7 8 6 4 Currency basket Valutakurven (nominal return) (nominell avkastning) Currency basket Valutakurven (net real return) (netto real avkastning) 2 3,7 2 4 5 6 7 8 9 1 11 12 13 14 8 Source: Norges Bank Investment Management
Annual excess return Percentage points 5 4 3 2 1-1 -2-3 -4 5 4 3 2 1-1 -2-3 -4 Annual relative return Accumulated annualised relative return -5 4 5 6 7 8 9 1 11 12 13-5 9 Source: Norges Bank Investment Management
Changes in value since 1996 Billions of kroner 31.12.213 31.12.212 Market value of the fund 5,38 3,816 Gross inflow of new capital 3,32 3,6 Management costs 24 21 Changes due to fluctuations in krone -39-331 Accumulated return 1,799 1,17 Equity 1,242 579 Fixed income 551 528 Real estate 5 1
Key figures Measured in the fund s international currency basket. Percent. 213 Last 1 years Since 1.1.1998 Gross annual return on fund Annual price inflation Annual management costs Annual net real return on fund 15.95 6.3 5.7 1.39 2.14 1.89.7.1.9 14.29 3.98 3.65 11
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
Developments in equity markets Measured in USD (Stoxx in EUR). Indexed (31.12.12 = 1) 13 13 12 11 1 9 12 11 1 9 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) Q4 213 7 % 1 % 6 % 2 % 213 21 % 3 % 17 % 9 % 7 7 jan. 12 jul. 12 jan. 13 jul. 13 jan. 14 8 13 Source: Bloomberg
Developments in emerging markets Measured in USD. Indexed (31.12.12 = 1) 15 15 14 13 12 14 13 12 S&P 5 FTSE EM MSCI EM 11 11 1 1 14 9 S&P 5 FTSE EM MSCI EM Q4 213 9 % 1 % 1 % 213 3 % -5 % -6 % 8 8 jan. 12 jul. 12 jan. 13 jul. 13 jan. 14 9 Source: Bloomberg
Market development in stock sectors FTSE Global All Cap-index. Measured in USD. (31.12.12 = 1) 14 13 12 11 1 9 14 13 12 11 1 9 Healthcare Consumer services Industrials Oil & gas Utilities 15 8 7 Healthcare Consumer services Industrials Oil and gas Utilities Basic materials Q4 213 8 % 8 % 9 % 6 % 2 % 5 % 213 36 % 34 % 31 % 15 % 12 % -1 % 6 6 jan. 12 jul. 12 jan. 13 jul. 13 jan. 14 8 7 Basic materials
Market development for bonds Barclays Global Aggregate Index. Measured in local currency. (31.12.12 = 1) 15 1 95 15 1 95 Dollar Euro Pound Yen 9 Dollar Euro Pound Yen Q4 213 % 1 % -1 % % 213-2 % 2 % -3 % 2 % 85 85 jan. 12 jul. 12 jan. 13 jul. 13 jan. 14 9 16 Source: Barclays Capital
Market development for bonds Measured in USD. Indexed (31.12.12 = 1) 15 15 1 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 Q4 213-1 % % 1 % % % 213-4 % -3 % % -3 % % 85 85 jan. 12 jul. 12 jan. 13 jul. 13 jan. 14 17 Source: Barclays Capital
1-year government bond yields Percent 7 7 6 5 4 6 5 4 UK USA Japan Germany 3 3 2 2 1 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. 14 1 18 Source: Bloomberg
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
2 The fund s investments Investments in 82 countries and 44 currencies. 31.12.213
Real estate investments Billions of kroner 6 5 52 6 5 4 4 3 25 3 2 2 1 11 1 21 31.12.211 31.12.212 31.12.213 Source: Norges Bank Investment Management
Real estate investments per 31.12.213 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 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
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
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
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 213 97.2% percent of resolutions proposed by the board 2.8% percent of resolutions proposed by shareholders Source: Norges Bank Investment Management
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 27 27 Source: Norges Bank Investment Management
Environmental investments 31.12.213, 31.4 billion kroner invested in 166 companies 1 9 8 7 6 5 4 3 2 1 1 9 8 7 6 5 4 3 2 1 28 Source: NBIM, FTSE classification
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%.% 3 4 5 6 7 8 9 1 11 12 13.% 29 Source: Norges Bank Investment Management
Published on web 28 February 214 Holding lists Voting records GIPS report Significant external suppliers External managers Monthly returns 3
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
213 GOVERNMENT PENSION FUND GLOBAL ANNUAL REPORT PRESS CONFERENCE 28 FEBRUARY 214