Norway’s sovereign wealth fund last year returned 13 percent, or a record annual profit of US$222 billion, but missed its self-imposed target for the second year in a row despite gains from the booming US technology sector.
Norges Bank Investment Management (NBIM) — the official name of the US$1.8 trillion fund — saw investments in equities gain 18 percent last year, it said in a statement yesterday.
After the value of real-estate holdings fell, the fund missed the benchmark it measures itself against by 45 basis points, it said.
Photo: Bloomberg
The relative return was the third-worst year in percentage terms, NBIM chief executive officer Nicolai Tangen said at a press conference at Norges Bank in Oslo, Norway.
The fund’s real-estate portfolio underperformed relative to the stock market and the fund was also underweight equities, in particular the biggest US tech stocks, he said.
Even so, NBIM ended last year with a tech-heavy portfolio, with companies including Apple Inc, Microsoft Corp and Nvidia Corp among its top 10 holdings.
In recent days, the sector has been in turmoil after Chinese artificial intelligence start-up DeepSeek (深度求索) raised questions over valuations.
Tangen said that the strong performance of global stock markets in recent years will eventually come to an end.
“I just want to warn again that this will not last forever,” he added.
LIMITED LEEWAY
Though NBIM is largely an index tracker that invests according to a strict mandate overseen by Norway’s finance ministry, it seeks to make most of its limited leeway. It owns, on average, 1.5 percent of all the world’s listed companies.
Founded in the early 1990s, NBIM is tasked with thinking long-term and investing Norway’s oil and gas revenues abroad.
Having started with seed capital of about US$300 million, the fund is today the world’s biggest single owner of equities, with the bulk of its capital in publicly listed stocks.
It measures itself against a bespoke benchmark based on the FTSE Global All Cap Index for equities and Bloomberg Barclays indices for fixed income.
The fund gained 1 percent on its fixed-income investments. Its unlisted real estate holdings fell 1 percent, while the return on unlisted renewable-energy infrastructure was down 10 percent, NBIM said.
The Norwegian government deposited 402 billion kroner (US$35.6 billion) into the fund last year, short of a record set in 2022 of nearly 1.1 trillion kroner.
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