Nicolai Tangen, chief executive officer of Norges Bank Investment Management (NBIM), speaks at a public event held at Trinity Church in Arendal, southern Norway, August 17, 2021. REUTERS/Gwladys Fouche
OSLO: Norway’s sovereign wealth fund returned 5.9%, or US$84bil (RM373bil), in the first quarter after markets continued to rally despite jitters over banks.
The US$1.4 trillion (RM6.2 trillion) fund, which manages Norway’s fossil wealth, gained 7.4% on stocks and 2.7% on its fixed-income investments, it said.
It’s the world’s biggest single owner of equities, and its returns are highly dependent on market movements.
Chief executive officer (CEO) Nicolai Tangen has spent more than a year warning that the fund’s growth over the last 25 years isn’t likely to continue in an environment of rising borrowing costs and soaring inflation that has brought equities down from all-time highs.
Last year, it reported its biggest loss since the 2008 financial crisis.
“The equity investments had the most positive contribution to the return in the quarter,” Trond Grande, deputy CEO, said in the statement. “The rise of the equity market was to a great extent driven by the technology and consumer discretionary sectors.”
Norges Bank Investment Management lost 1% on its unlisted real estate holdings, while the loss on unlisted renewable energy infrastructure was 3.8%.
Overall, its total return was 0.06 percentage points lower than that of the benchmark against which it measures itself.
The fund is largely an index tracker, investing according to a strict mandate from the Finance Ministry. It seeks to make the most of its limited leeway to try to beat the benchmark it is measured against, something it has managed in eight of the last 10 years.
The government deposited 217 billion kroner (US$20bil or RM88.7bil) into the fund during the quarter. — Bloomberg
