Despite market gains, the value of Norway’s Government Pension Fund Global (GPFG) fell by NOK 156bn in the first half of 2025, with returns also failing to meet benchmark levels, Norges Bank Investment Management (NBIM) has revealed.

The group's interim update showed that GPFG's return was 5.7 percent in the first half of 2025.

This included a 6.7 per cent return on the fund's equity investments, which make up 70.6 per cent of the fund's holdings.

Financial services, telecoms and utilities were the strongest sectors within equities, delivering returns of 16.5 per cent, 13.3 per cent and 12.4 per cent, respectively, while health care produced the weakest return at -2.9 per cent.

In addition to this, the return on fixed-income investments, which make up 27.1 per cent of its portfolio, was 3.3 per cent, while investments in unlisted real estate returned 4 per cent, and the return on unlisted renewable energy infrastructure was 9.4 per cent.

"The result is driven by good returns in the stock market, particularly in the financial sector," NBIM CEO, Nicolai Tangen, said.

But despite these positive returns, NBIM confirmed that the return on the fund for the first half of the year was 0.05 percentage point less than the return on the benchmark index from the Ministry of Finance, corresponding to a relative return of NOK -10bn.

Equity management contributed 0.03 percentage point to the relative return for the period, while fixed-income management contributed 0.06 percentage point to
the relative returns.

However, it was investments in real estate that had the most negative impact on the fund’s relative return, when measured against the equities and bonds sold to fund them.

According to the report, unlisted real estate investments contributed -0.04
percentage points, with this weak performance mainly attributable to investments in the logistics and office segments in the US.

Listed real estate investments also contributed -0.08 percentage point to the relative return.

NBIM clarified that the relative return for the period was also affected by the fund having a lower allocation to equities and a higher allocation to bonds than
the benchmark index did.

Currency shifts also impacted the fund during the first half of the year, as the Norweigan krone appreciated against several of the main currencies during the first half of the year, which led to a NOK 1,010bn fall in the value of the fund.

This was partially offset by transfers from the government for the first half of the year, which totalled NOK 156bn after costs, as well as an accounting return of NOK 698bn.

Overall, this saw the value of the fund decrease by NOK 156bn during the period to NOK 19,586bn.

In addition to the funding updates, the report provided more detail on NBIM's engagement with the companies behind its investments, as it looked to take advantage of voting to exercise its ownership rights.

In total, NBIM voted on a total of 87,399 proposals at 7,936 shareholder meetings in the first half of 2025.

According to NBIM, the group's work focused mainly on governance and sustainability issues, which were raised at 55.4 per cent of the 1,427 meetings had with companies during the period.

These issues mostly concerned capital management, climate change and human capita.

The fund has been facing growing scrutiny over its investments over the past month, with NBIM recently tasked by the government to review the fund's holdings in Israel, which has already prompted changes in its portfolio.

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