The Government Pension Fund Norway’s (GPFN) investment manager Folketrygdfondet has low management costs compared to its global peers, a new report has found.

Analysis by CEM Benchmarking Inc (CEM) found that Folketrygdfondet’s management costs of 0.061 per cent (0.060 per cent in 2020) were the lowest of all in the group of comparable funds, where the median cost was 0.418 per cent (0.407 per cent in 2020).

In other words, the median cost was more than six times higher than Folketrygdfondet’s.

However, it should be noted that the funds with which GPFN is compared to have a lower proportion of equities and bonds and more unlisted assets, which have historically been associated with higher management costs.

“The main reason for the low costs is that we manage the entire GPFN ourselves, without using external managers. It's also due to our cost-effective management, which in 2023 was about the same as the year before," Folketrygdfondet chief risk officer, Jørn Terje Krekling, said.

In order to form a picture of how cost-effective Folketrygdfondet is, CEM created a cost reference that shows what the comparable funds would have had in costs if they were composed of equities and bonds in the same way as SPN.

In this comparison, Folketrygdfondet also came out very well with costs that are less than half of the cost reference (0.090 percentage points lower).

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