Norway’s Sovereign Wealth Fund Defies Odds with Strong First-Quarter Profit

Norway’s Sovereign Wealth Fund Announces First-Quarter Profit

Norway’s largest sovereign wealth fund, the Government Pension Fund Global, announced a first-quarter profit of 1.21 trillion kroner ($110 billion) driven by strong returns on its investments in technology stocks. The fund experienced good returns on equity and fixed income investments but saw weak results in real estate leading to an overall negative result for the quarter.

Equity investments returned 9.1% while fixed income investments had a yield of -0.4%. Unlisted real estate investments returned -0.5%, and unlisted renewable energy infrastructure investments had a return of -11.4%. Despite the strong returns, the fund’s overall return was 0.1 percentage point lower than the benchmark index.

The Deputy CEO of Norges Bank Investment Management, Trond Grande, attributed the strong first-quarter return to the tech sector, particularly companies such as Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla known as the Magnificent Seven. Grande noted that market participants are reassessing their outlook for these companies and their business models as they take a more nuanced look at them. While Nvidia continued to perform well, other companies like Tesla and Apple saw weakness in this period.