Oil fund makes every Norwegian paper millionaires
The Government Pension Fund Global is now worth more than 7.000 billion kroner (€796 billion). If divided on the 5,2 million Norwegians, each one would have 1,35 million. That is five times the annual net income of a Swede.
Despite the crash in oil price recently, the Norwegian sovereign fund returned 10,6 percent on the fund’s equity portfolio in 2014.
The fund’s market value passed NOK 7,000 billion last week and was Tuesday worth 7,140 billion. A live, second-by-second, online update is made available on Norges Bank’s portal for the investment management.
It is not so that every Norwegian has bookmarked this page and is checking the current value for breakfast every day. The fund is well preserved, saving for future generations. One day the oil will run out, but the return on the fund will continue to benefit the Norwegian population.
Politicians in the parliament mostly agree on the fundamental rules; only 4 percent of the fund value can be used in the annual national budget. As long as the fund continues to return more than 4 percent, and as long as the income from oil continues to fill up with cash, the revenue will increase the total value.
Since established in 1998, the fund has returned 5,8 percent annually.
On paper, the value of the fund gives each Norwegian NOK 1,35 million (€153,486). That is five times the annual net income for people living in Sweden, which is €30,612 accrording to the list of European countries by average wage posted by Wikipedia. The sum is 5,5 times the annual net income of a Finn and 31 times the annual income for an average Russian.
The sharp increase in the value of the fund last year is mainly due to the recent bullish markets as the fund has more than 60 percent of its portfolio invested in the global stock markets.
The fund is now the world’s largest state investment fund and owns approximately 1,25 percent of all stocks registered on the stock-markets globally.
