Norway’s sovereign wealth fund, the world’s largest, earned 1,501 billion kroner (131 billion euros) in the first half of the year, boosted by the stock markets, the Norwegian central bank, which manages the fund, announced on Tuesday.
Norwegian sovereign wealth fund hits record high with 10% return
This performance represents a return of 10% and helped bring the fund’s value to a staggering 15,299 billion crowns (1,332 billion euros) at the end of June. In six months, the fund has virtually wiped out the colossal loss (1,637 billion crowns) incurred last year as a result of the war in Ukraine and the global economic downturn.
Intended to leverage the Norwegian government’s oil and gas revenues to finance future spending by the generous welfare state, it is invested mainly in equities (71.1% of the portfolio), bonds (27.1%) and, to a lesser extent, real estate (2.3%). Equity investments returned 13.66%, thanks in particular to technology stocks and luxury goods, while bond investments returned 2.25%, while real estate investments, affected by rising interest rates, lost 4.57%. Norges Bank was originally due to publish its half-year results on Wednesday morning, but these were mistakenly sent to the media on Tuesday evening.
Since the beginning of the year, the enormous cash reserve has also benefited, to the tune of 980 billion kroner, from the weakening of the Norwegian krone, which has mechanically increased the value of assets held in dollars, euros and other foreign currencies. The government also added 389 billion crowns to its coffers. In all, the fund’s value increased by 2,870 billion crowns in the first six months of the year. According to the Sovereign Wealth Fund Institute, Norway’s sovereign wealth fund is the world’s largest, just ahead of two Chinese funds.
