Norway's Government Pension Fund Global, Oslo, returned 7.1% on its investments in the quarter ended March 31, driven primarily by billowing equity markets, the fund reported Friday.
It was the third biggest gain in the fund's 13-year history.
Total assets grew to 3.496 trillion Norwegian kroner ($608 billion), up 5.6% from the end of 2011.
Investment gains added 234 billion kroner, while capital inflows from the government's sale of petroleum added 60 billion kroner. A stronger kroner vs. several worldwide currencies reduced assets by 110 billion kroner.
Equities returned 11% in the quarter, 21 basis points above the fund's custom benchmark, mainly because of easing of the European sovereign debt crisis and signs of improved economic conditions in the U.S. Technology and financial stocks were top performers.
Fixed-income assets returned 1.6%, as gains in corporate bonds outpaced a decline in government bonds. Fixed-income investments outperformed the fund's custom benchmark by six basis points.
Seventy percent of the new capital from the government in the quarter was invested in bonds, with the rest put into stocks.
During the quarter, the fund dumped its remaining Portuguese and Irish government debt and reduced holdings in Italian, Spanish and British government debt in favor of U.S. Treasuries and local-currency emerging markets debt.
