Subject to strict guidelines
The world’s largest sovereign wealth fund rakes in many billions
08/16/2023, 09:16 am
The Norwegian sovereign wealth fund has benefited from the weakness of the domestic currency since the beginning of the year. The return can be seen accordingly. The state fund thus compensates for the record loss from the previous year.
The Norwegian sovereign wealth fund has again made a billion-dollar profit in the first half of the year. After a record loss in the previous year, the plus added up to the equivalent of around 130 billion euros, as announced by the world’s largest sovereign wealth fund. The publication of the half-year figures was actually planned for Wednesday, but it accidentally happened on Tuesday evening.
Strong equity markets and a weak national currency supported the fund. High-tech stocks posted the highest returns at 38.6 percent. “The sector benefited from strong demand for new artificial intelligence solutions from the largest internet and software companies and their semiconductor suppliers,” the fund said. In the first six months of 2022, the fund posted a record loss of around 170 billion euros due to the weakening stock markets as a result of fears of war, inflation and recession.
However, the return on capital of the fund, which is equivalent to around 1.3 trillion euros, was 0.23 percentage points lower than that of its reference index from January to June 2023. Established in 1996, the sovereign wealth fund invests the income from the Norwegian oil and gas sector. He has interests in more than 9,300 companies worldwide, owning 1.5 percent of all listed shares.
The pension fund is intended to finance the expenses for future generations in the Norwegian welfare state. In addition to companies, he invested in bonds, real estate and recently also directly in wind and solar power plants. The fund is subject to strict guidelines, for example with regard to ethical issues, human rights and environmental protection.