Nicolai Tangen, in Arendal, Norway, on Aug. 12.
(Bloomberg) — Norway’s sovereign wealth fund enjoyed its best quarter since late 2023, returning 6.4% in the second quarter, propelled by stock-market gains.
Equities drove the results for the $1.9 trillion fund, at 8.45%, with unlisted infrastructure investments generating 8.1%, Norges Bank Investment Management said in a report on Tuesday. Fixed income and unlisted real estate had a small positive contribution.
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The world’s largest wealth fund owns about 1.5% of listed stocks globally. More than two thirds of the fund is in equities, all outside of Norway.
Nicolai Tangen, in Arendal, Norway, on Aug. 12.Photographer: Carina Johansen/Bloomberg
Among its top 10 holdings, the fund added to its stakes in Nvidia Corp., Apple Inc, Taiwan Semiconductor Manufacturing Co Ltd, Tesla Inc and Berkshire Hathaway Inc in the first half.
Over the same period, the fund reduced its ownership in Microsoft Corp, Alphabet Inc, Meta Platforms Inc and Broadcom Inc, and cut positions in oil majors.
The fund’s first-half return was 5.7%, missing the benchmark it measures itself against by 5 basis points. European stocks gained the most, at 17.8%, versus just 1.4% for North American stocks.
“It’s really an environment where you need to be very broadly diversified and very long term in your investment horizon, because it’s just totally impossible to move around your portfolio, in particular when you are the size that we are, based on short-term movements,” Chief Executive Officer Nicolai Tangen said in an interview on Bloomberg TV. “We have more than half our portfolio in the US and just under a third in Europe, so we’re really happy with the geographical diversification we have for the moment.”
Financial firms returned 16.5% in the first six months of the year and accounted for 17% of the equity investments, NBIM said. The greatest contribution came from European banks, “driven by expectations of increased public expenditure and further healthy profitability.” Other positive drivers included telecommunication companies and utilities, while health care performed the weakest, the fund said.
“If you would have told me what would happen politically, technologically, in the world and the situation around tariffs, I’d never have believed markets would hold up this well,” Tangen said in an interview.
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