In the first half of 2024, Norway’s Government Pension Fund Global (GPFG), often referred to as the world’s largest sovereign wealth fund, posted a profit of 125 billion euros.
This result, which translates into a return of 8.6%, is mainly attributable to significant gains on its equity investments.
The technology, financial and healthcare sectors were the main drivers of this performance, reflecting a strategic allocation that captured bullish market trends.
Equities, which account for 72% of the fund’s portfolio, generated a return of 12.5% over the period.
The exceptional performance of equities was largely due to the appreciation of technology stocks, underpinned by the growing demand for artificial intelligence solutions.
Conversely, bonds, which make up 26.1% of the portfolio, posted a slight contraction of 0.6%, illustrating the challenges facing bond markets in an environment of volatile interest rates.
Diversification and yield: a contrasting strategy
GPFG’s overall performance should not mask the contrasts within its portfolio.
Real estate investments yielded a modest 1.5% in the first half of the year.
By contrast, investments in unlisted renewable energy projects, although still marginally represented, suffered a significant loss of 18%.
This underperformance reflects the particular challenges posed by volatile energy markets, as well as the regulatory uncertainties weighing on this sector.
GPFG, fuelled by Norwegian state oil revenues, stands out for its broad diversification.
With holdings in almost 9,000 companies worldwide, the fund holds an average of 1.5% of all shares in globally listed companies.
This strategic positioning enables it not only to exert considerable influence on financial markets, but also to effectively spread the risks inherent in such diversified investments.
