Norway's Government Pension Fund Global returned 6.9% in 2016, with strong equities performance in the second half of the year, said its latest annual report.
The sovereign wealth fund's return was equivalent to 447 billion Norwegian kroner ($51.8 billion), and compared with a 2.7% return in 2015.
In the period of 1998 to 2016, the fund’s average annual return was 5.7%.
Assets increased by 0.5% over the year ended Dec. 31 to 7.51 trillion kroner.
The fund's equities allocation increased over the year to 62.5% from 61.2%. These investments returned 8.7% in 2016, compared with 3.8% in 2015.
Fixed income, to which the fund has a 34.3% allocation, returned 4.3%. At the end of 2015, the fund had a 35.7% allocation and posted a 0.3% return.
The overall return on the fund's equity and fixed-income investments was 0.15 percentage points higher than the return on the benchmark index from the Ministry of Finance, said the report.
Real estate returned 0.8% in 2016, and the fund had a 3.2% allocation to the asset class. A year earlier, the allocation was 3.1%, with the exposure gaining 10%.
Currency effects detracted from the fund's value in 2016 by 306 billion kroner. In 2015, currency effects added 668 billion kroner.
The fund also recorded its first withdrawal of capital by the Norwegian government in 2016, at 101 billion kroner. In 2015, the fund recorded a capital inflow of 46 billion kroner.