The world’s largest sovereign wealth fund, Government Pension Fund Global, Oslo, returned 8.6% in the first half of 2024, equivalent to a 1.48 trillion Norwegian kroner ($138.4 billion) gain, with equities — and technology stocks in particular — leading the charge.
The Norwegian wealth fund, run by in-house manager Norges Bank Investment Management, gained 12.5% on its equity investments, charged by technology stock gains that contributed 771 billion kroner to returns, according to a fund update on Aug. 14. Nvidia Corp. was the top performer, adding 225 billion kroner, followed by Microsoft at 88 billion kroner and Alphabet at 67 billion kroner.
Equities accounted for 72% of the total 17.75 trillion kroner in assets.
The 26.1% allocation to fixed income returned -0.6% for the six months ended June 30, amid inflation remaining “higher than expected,” a report accompanying the update said.
Unlisted real estate, which accounts for 1.7% of the fund, lost 0.5%, with the negative return “driven mainly by investments in the U.S. office sector,” the report said.
Unlisted renewable energy infrastructure, the fund’s remaining exposure, lost -17.7% in the first six months of the year. The negative return “comprises net income from power sales and changes in the value of the investments,” the report said. “A higher cost of capital adversely affected the value of the investments during the period,” and the report said this higher cost will continue to affect future net income.
The return was 0.04 percentage points lower than the return on the wealth fund’s benchmark index, which is set by the Norwegian Ministry of Finance based on FTSE Group and Bloomberg indexes.
"The equity investments gave a very strong return in the first half of the year. The result was mainly driven by the technology stocks, due to increased demand for new solutions in artificial intelligence," CEO Nicolai Tangen said in a statement.
Assets grew by 12.5% over the six months.
The sovereign wealth fund also published an updated holdings list for the first half of the year. “We are already the world's most transparent fund, but now we are increasing transparency even further. From now on, everyone will be able to find an updated overview of all our investments on a half-yearly basis," Tangen said.
