The return on the equity portfolio in 2002 was negative, at -24.4 per cent. Equity markets fell in 2002 for the third year in succession. Equity investments have not performed as poorly in any period since the interwar years. In contrast to the weak equity market, international interest rates declined and returns on fixed income instruments were high. The return on the Fund's fixed income portfolio was 9.9 per cent.

For the period 1997 to 2002, the real return after management costs averaged 2.5 per cent per annum.

In 2002, Norges Bank achieved a return that was 0.25 percentage point higher than that on the benchmark portfolio defined by the Ministry of Finance. This is the fifth consecutive year since equities were introduced into the portfolio in 1998 that Norges Bank has outperformed the benchmark. The overall net excess return achieved through active management during these years is NOK 4.9 billion.

Transfers amounting to NOK 125 billion were made by the Ministry of Finance during 2002, At the end of the year, the value of the Petroleum Fund's assets abroad was NOK 609 billion. The value of the Petroleum Fund, measured in NOK, was reduced by NOK 4 billion from 2001 to 2002, due to the appreciation of the krone. However, the krone exchange rate has no effect on the future international purchasing power of the Petroleum Fund. Calculated in international currency, the value of the Petroleum Fund increased by the equivalent of about NOK 100 billion in 2002.

Norwegian and English versions of the annual report are available on www.nbim.no.