the first complete list was published in the annual report for 1998. this decision has paved the way for all the subsequent discussions about various individual investments. norges bank submits extensive reports to the ministry and storting on the results and activities of the fund. our annual report is submitted as an appendix to the ministry of finance ’ s annual report to the storting on the management of the government pension fund. norges bank appears before the standing committee on finance and economic affairs of the storting at annual hearings. the bank advises the ministry on important issues related to the management of the fund. norges bank ’ s supervisory council submits its own report to the storting concerning its oversight activities. the office of the auditor general carries out – as our owner has expressed it – an important function through its responsibility for monitoring the ministry ’ s exercise of authority in relation to norges bank and auditing the item in the government accounts that refers to the government pension fund global. the fund ’ s accounts and notes to the accounts contain a growing body of information. as from the 2011 accounting year, norges bank will shift to international financial reporting standards ( ifrs ). transparency is important for the fund ’ s foreign investments. some authorities are sceptical of other countries ’ sovereign wealth funds. this scepticism is reflected in an annual survey conducted by edwin truman, senior fellow at the highly renowned peterson institute of international economics in washington. his survey is by far the most thorough and systematic – the most authoritative – assessment. truman ’ s criteria were also included in the basis for the santiago principles which, facilitated by the imf, were introduced in 2008 and implemented by a number of sovereign wealth funds. to quote truman : “ sovereign wealth funds ( swfs ), large pools of government - owned funds that are invested in whole or in part outside their home country, burst upon the policy consciousness only three years ago. their explosive growth up until 2007 fanned widespread anxieties about shifts of global economic wealth and the roles of governments in managing that wealth. on the other hand, swf investments helped some major western financial institutions weather the recent financial crisis. ” chart : truman ’ s ranking in truman ’ s most recent study on the transparency of sovereign wealth funds, the government pension fund global was ranked in first place. the fund has also improved its score since the 2009 survey. we note with satisfaction that such a young fund has come out ahead of established us and european funds

and us mortgage - backed bonds. an investor such as the fund can survive a liquidity squeeze for a period. we were prepared to maintain positions in fixed - income securities to maturity and the vast majority of borrowers appear to be honouring their debt obligations. the crisis nevertheless revealed that the exposure to underlying systematic risk was greater than we perhaps realised at the outset. in the hearing before the storting ( norwegian parliament ) in 2009, directly after the reporting of substantial losses in 2008, i indicated that unless the economic outlook went from bad to considerably worse, active management would deliver substantial excess returns in the coming years. even though there was probably an underlying fear of a collapse in the financial system, it was fairly clear that the main factor behind the decline was limited market liquidity. since the second quarter of last year, book values have increased even faster than we dared to hope. returns have also been good as a result of a restructuring of the portfolio. the fund continued to pursue active management through the crisis. it has proven important that active management could be pursued. active management has on the whole delivered good results, contributing an average 0. 3 percentage point to the overall annual return. all in all, active management has increased the value of the fund by several tens of billions of norwegian kroner. chart : key components of the design of the fund ’ s investment strategy the ministry of finance sets out the investment strategy for the fund, while norges bank as manager provides advice on a regular basis. this past summer, we proposed several important changes to the fund ’ s investment strategy 14. the proposal illustrates the relationship between the various components of the strategy. we have also pointed to possible improvements to the investment guidelines for the fund. the fixed income portfolio has a number of weaknesses. we have learned that we should not necessarily invest most in those companies and states that are the most eager borrowers. large borrowers thus have a high weight in the portfolios. our assessment is that the fixed income portfolio should instead be weighted based on the income that is to service the debt. the gdp - weighted alternative is the most relevant alternative for government debt. both the equity and fixed income portfolios are constructed using regional weights. today ’ s distribution was partly determined using norwegian import weights from the mid - 1990s. it should be considered whether the regional weights should no longer be used so that the fund ’ s holdings across all companies and recognised markets are of equal size. if regional weighting is discontinued,