OSLO – Norway’s $1.6 trillion sovereign wealth fund, the world’s largest, reported a record profit of 2.22 trillion crowns ($213 billion) in 2023, driven by strong returns on its investments in technology stocks.
The result compared with a record loss in 2022 of 1.64 trillion crowns when tech stocks fell, Norges Bank Investment Management (NBIM) said on Tuesday.
“2023 ended a lot better than expected,” NBIM CEO Nicolai Tangen told a press conference.
Tech stocks rose on average by more than 50%, driven by a business breakthrough for artificial intelligence, by an improvement in the general economic outlook and expectations for lower interest rates, the fund said.
The fund’s most valuable company stake was in Microsoft where it held shares worth 358.4 billion crowns, having earned a return of 129 billion during the year. It was closely followed by Apple with a 337.3 billion stake following returns of 114 billion crowns.
The fund’s return on investment in 2023 stood at 16.1% for the year, 0.18 percentage point lower than the return on the fund’s benchmark index.
The fund invests the Norwegian state’s revenues from oil and gas production in equities, bonds, property and renewable projects abroad.
It holds stakes in more than 8,800 companies globally and owns 1.5% of all listed stocks.
The return on equity investments was 21.3% last year, fixed income investments gained 6.1%, unlisted real estate returned -12.4% and unlisted renewable energy infrastructure 3.7%, NBIM said.
At the end of the year, 70.9% of the fund’s assets were allocated to equities, up from 69.8% in 2022, bonds declined to 27.1% from 27.5%, unlisted real estate fell to 1.9% from 2.7% and renewable infrastructure held steady at 0.1% of investments.
The inflows from the Norwegian state into the fund in 2023 were 711 billion crowns, the second largest in the fund’s history, short of a record set in 2022 of nearly 1.1 trillion crowns.
Norway is a major crude oil exporter and Europe’s largest gas supplier after a drop in Russian gas flows in 2022 and has benefited from higher energy prices due to the war in Ukraine.
($1 = 10.4109 Norwegian crowns) (Reporting by Gwladys Fouche in Oslo, editing by Terje Solsvik, Jane Merriman and Barbara Lewis)
