Norway's vast fund for oil wealth posted a 23 percent loss on investment for 2008 _ its worst ever _ but continued growing in size because of record transfers of surplus capital from the government, the central bank said Wednesday.
Norges Bank said the fund lost 633 billion kroner ($90 billion) on investment, when measured in a basket of international currencies, during 2008 _ its worst result since it was founded in 1996.
"The results for the year were the weakest in the fund's history," said a central bank news release. But "the long-term strategy is unchanged."
However, the size of the Government Pension Fund-Global, formerly called the oil fund, grew 13 percent during 2008 to 2.275 trillion kroner ($325 billion), boosted by record government transfers of 384 billion kroner ($54.8 billion). Much of those extra revenues were due to record oil prices through the first seven months of the year.
The fund _ which was created to invest Norway's excess oil wealth abroad to not cause the domestic economy to overheat _ typically invests about 60 percent of its capital in stocks in more than 7,000 companies worldwide, with the remainder in government-backed bonds.
Norway, with a population of 4.8 million people, is a major oil and gas exporter, and hopes to preserve parts of the the profits for future generations.
"The fund has a much longer investment horizon than the vast majority of investors," said Yngve Slyngstad, the fund's senior manager. "The key question is therefore how good today's investments will prove in the long term."
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