OSLO: Norway’s $1.3 trillion sovereign wealth fund, the world’s largest, posted a first quarter profit thanks to strong stock markets, it said on Wednesday.
The fund had a 4 percent return on investment, earning 382 billion crowns ($45.7 billion) between January and March, beating its own benchmark index. “The rise of the equity market was to a great extent driven by the finance and energy sectors,” the fund’s deputy CEO Trond Grande said in a statement.
While stocks earned a return of 6.6 percent, the fixed income portfolio had a loss of 3.2 percent while unlisted real estate had a positive return of 1.4 percent.
The fund invests the Norwegian state’s revenues from oil and gas production into 9,100 companies worldwide, owning 1.4 percent of all listed shares globally, and also invests in bonds, property and green infrastructure.
The fund, which generated $123 billion in returns last year, used a previous strategy update to shift its equity exposure toward US stocks and away from Europe. Much of last year’s performance was driven by the fund’s holdings of US technology stocks.
A recent Bloomberg report quoted Grade as saying, “the fund still has room to add risk within its current investment framework.”
The fund’s mandate gives it a so-called risk budget that lets it veer 125 basis points from its benchmark. For now, it’s tended not to exceed 30-50 basis points, according to Grande.