Norway wealth fund posts strong quarterly return of US$84 billion

Norway wealth fund posts strong quarterly return of US$84 billion

Norway’s sovereign wealth fund, the largest in the world, posted a gain of US$84 billion in the first quarter due to the strong stock market following big losses last year, the central bank said Friday.

The robust showing, representing a return of 5.9 per cent, erases about half of the fund’s massive US$165.4-billion loss last year amid turbulence over the start of the war in Ukraine.

The fund, one of the world’s biggest investors, was worth a dizzying US$1.34 trillion at the end of March, or almost US$245,000 for each of Norway’s 5.5 million inhabitants.

“The equity investments had the most positive contribution to the return in the quarter,” the fund’s deputy director Trond Grande said in a statement.

“The rise of the equity market was to a great extent driven by the technology and consumer discretionary sector,” he added.

Fuelled by revenues from Norway’s state-owned oil and gas companies, the fund is aimed at financing future spending in the generous welfare state.

According to a ranking by the Sovereign Wealth Fund Institute (SWFI), the Norwegian fund is the biggest in the world, just ahead of the China Investment Corporation and followed by those in Abu Dhabi, Kuwait and Singapore.

Shares, which accounted for 70.1 per cent of the Norwegian fund’s portfolio at the end of March, saw a 7.4 per cent return in the first quarter.

The fund has stakes in more than 9,200 companies worldwide, representing 1.5 per cent of the total market capitalisation.

Bond investments, representing 27.3 per cent of assets, gained 2.7 per cent in the period.

Real estate holdings and those in unlisted renewable energy projects, which accounted for 2.4 and 0.1 per cent, respectively, fell one per cent and 3.8 per cent.


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