Norway’s Sovereign Wealth Fund Sees First-Quarter Profit, But Returns Are Lower Than Benchmark

Norway’s sovereign wealth fund, the world’s largest, reported a first-quarter profit of 1.21 trillion kroner ($110 billion) driven by strong returns on its investments in technology stocks. Despite good results in equity and fixed income investments, the fund saw weak returns in real estate leading to an overall negative result for the quarter.

Equity investments returned 9.1% while fixed income investments had a yield of -0.4% and unlisted real estate investments returned -0.5%. Unlisted renewable energy infrastructure investments had a return of -11.4%. Despite the strong returns, the fund’s overall return was 0.1 percentage point lower than the benchmark index. Established in the 1990s, Norway’s sovereign wealth fund invests surplus revenues from the country’s oil and gas sector in companies worldwide.

Deputy CEO of Norges Bank Investment Management, Trond Grande, attributed the strong first-quarter return to the tech sector. He mentioned that market participants are reassessing their outlook for companies such as Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla, known as the Magnificent Seven. Grande noted that while Nvidia continued to perform well, other companies like Tesla and Apple saw weakness. He highlighted that the market is taking a more nuanced look at these companies and their business models.

Norway’s giant sovereign wealth fund announced a first-quarter profit of 136 billion ($85 billion) driven by strong returns on its investments in technology stocks.

The Government Pension Fund Global reported a value of 738 billion kroner ($72 billion) at the end of March.

The fund experienced good results on equity and fixed income investments but saw weak results in real estate leading to an overall negative result for the quarter.

Equity investments returned 7% while fixed income investments had a yield of -3% and unlisted real estate investments returned -2%. The unlisted renewable energy infrastructure investments had a return of -4%. Despite