Oil prices are down, but the value of Norway’s huge sovereign wealth fund known as the oil fund keeps growing. Experts weren’t as pleased with the fund’s returns last year, but its growth has exceeded the expectations of Norway’s central bank.
Asked whether he was surprised that the fund has doubled in value just in the last three years, to a dizzying NOK 6500 billion by the end of 2014, central bank government Øystein Olsen told newspaper Aftenposten “yes, we haven’t been perfect in our outlook for returns in recent years.”
The fund has in fact put the bank’s pessimism to shame. Olsen had predicted in 2012 that the fund’s returns would decline but instead it earned 13.4 percent in 2012, 15.9 percent in 2013 and 7.6 percent last year. The earnings on the fund amounted to around NOK 544 billion, which, combined with the fresh oil revenues flowing into it, left it once again as the largest sovereign wealth fund in the world.
While Norway suddenly face some economic uncertainty because of lower oil prices, it’s winning in the finance markets and so are Norwegians. Along with the fund’s annual results came the inevitable conclusions that given Norway’s relatively small population, the size of the fund means that every Norwegian is now a millionaire. The fund, though, will only see its assets spread among the public when it helps cover pension costs in the years to come.