February 27, 2024

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The world's largest sovereign wealth fund achieves record profits of $213 billion

The world's largest sovereign wealth fund achieves record profits of $213 billion

This follows a record loss of 1.64 trillion kroner for the whole of 2022, which the fund attributed to “highly unusual” market conditions at the time.

“Despite high inflation and geopolitical turmoil, the stock market in 2023 was very strong, compared to the weak year in 2022,” Nikolai Tangen, CEO of Norges Bank Investment Management, said in a statement.

“Technology stocks in particular have done very well,” he added.

Norwegian sovereign wealth fund The largest in the worldIt was established in the 1990s to invest surplus revenues from the country's oil and gas sector. To date, the fund has invested money in more than 8,500 companies in 70 countries around the world.

Last year, the investment department of the Bank of Norway He said The return on equity investments was 21.3%, the return on fixed income investments was 6.1%, while the return on investments in unlisted real estate was -12.4%.

The fund said that the negative year for its unlisted real estate investments was due to high interest rates and declining demand.

The fund will return 3.7% on investments in unlisted renewable energy infrastructure in 2023.

At the end of last year, Norges Bank Investment Management said nearly 80% of the fund was invested in equities, 27.1% in fixed income, 1.9% in unlisted real estate, and 0.1% in unlisted renewable energy infrastructure. included.

When asked at a news conference what geopolitical issues were likely to impact stocks in 2024, Tangen of Norges Bank Investment Management responded: “The thing is, you have geopolitical hotspots in a lot of places these days.”

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“So, what factors should we pay attention to? Well, the tension between America and China is having a negative impact on economic growth and global trade. The fact that people are moving closer abroad and moving production closer to home is an inflationary force,” he continued.

“We are seeing the impact of geopolitical tensions in the Middle East through longer trade routes [and] High shipping costs. So, this is negative. Of course, the scariest geopolitical situations are the ones you know nothing about, and which haven't happened yet.”