Norwayâ€™s sovereign wealth fund sold all its Irish and Portuguese government bonds after rejecting the Greek debt swap and warned that Europe faces considerable challenges.
The $610 billion Government Pension Fund Global returned 7.1 percent, or 234 billion kroner ($41 billion), as measured by a basket of currencies, in the first quarter, the Oslo-based investor said today. Its equity holdings gained 11 percent while its fixed-income investments rose 1.6 percent.
The fund, which voted against Greeceâ€™s debt swap this year because it disagreed with being subordinated to the European Central Bank, also said it reduced debt holdings in Italy and Spain amid a broader strategy to cut investments in Europe. The fund added government bonds from emerging markets such as Brazil, Mexico and India.
â€œPredictability is important for a long-term investor and the euro-area faces considerable structural and monetary challenges,â€ Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, said in a statement.
Stocks jumped globally in the quarter after the European Central Bank stepped in with more than $1 trillion in three-year loans to the regionâ€™s banks. The rally was tempered toward the end after Spain announced in March it would miss a deficit target and as austerity measures dragged euro-region economies into a recession and boosted unemployment to a 15-year high.
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