Norway’s $1.8 trillion sovereign wealth fund returned 4.4%, or $76.4 billion, in the third quarter after broad equity gains on declining interest rates.
Norges Bank Investment Management, the world’s biggest single owner of listed companies, added 4.5% on stocks in the period and 4.2% on fixed-income investments, according to a statement. The fund’s total return was 0.1 percentage points lower than that of the benchmark against which it measures itself.
U.S. equities advanced in the third quarter supported by improved economic data, including softer inflation figures. Widespread anticipation that the Federal Reserve would start easing monetary policy also spurred a shift out of big-tech stocks and into those likely to benefit from lower interest rates and a growing economy.
“We had a positive return across all our investment areas,” Deputy Chief Executive Officer Trond Grande said in the statement. “Falling interest rates led to a broad rise in the stock market.”
For the second quarter in a row, real estate weighed on returns. The fund gained 0.8% on its unlisted real estate holdings and 10.8% on unlisted renewable-energy infrastructure.
Created in the 1990s to invest Norway’s oil and gas revenues abroad, the fund is largely an index tracker. It invests according to a strict mandate from the Finance Ministry, measuring itself against a bespoke benchmark index based on the FTSE Global All Cap Index for equities and Bloomberg Barclays indexes for fixed income. The bulk of NBIM’s capital is in publicly listed equities.
The government deposited 99 billion kroner into the fund during the quarter.
