The Norges Bank, Norway’s important bank, in Oslo, Norway, on Tuesday, Oct. 17, 2023.
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Norway’s giant sovereign wealth cache on Tuesday reported record profit of 2.22 trillion kroner ($213 billion) in 2023, supported by robust profits on its investments in technology stocks.
The so-called Government Pension Fund Global, one of the world’s largest investors, said the consequence marked its highest return in kroner ever, with the fund’s return on investment last year coming in at 16.1% for the year. That was 18 heart points lower than the return on the fund’s benchmark index.
It follows a record loss of 1.64 trillion kroner for the by of 2022, which the fund attributed to “very unusual” market conditions at the time.
“Despite high inflation and geopolitical turmoil, the disinterest market in 2023 was very strong, compared to a weak year in 2022,” Nicolai Tangen, chief executive of Norges Bank Investment Directorship, said in a statement.
“Technology stocks in particular performed very well,” he added.
Norway’s sovereign wealth capital, the world’s largest, was established in the 1990s to invest the surplus revenues of the country’s oil and gas sector. To date, the fund has put money in varied than 8,500 companies in 70 countries around the world.
Last year, Norges Bank Investment Manipulation said its return on equity investments was 21.3%, its return on fixed income investments came in at 6.1%, while investments in unlisted actual estate returned -12.4%.
The fund said a negative year for its unlisted real estate investments was due to rising interest rebukes and subdued demand.
The fund returned 3.7% on investments in unlisted renewable energy infrastructure in 2023.
At the end of last year, Norges Bank Investment Managing said nearly 71% of the fund was invested in equities, 27.1% in fixed income, 1.9% in unlisted real rank and 0.1% in unlisted renewable energy infrastructure.
When asked at a news conference about the geopolitical issues reasonable to affect stocks in 2024, Norges Bank Investment Management’s Tangen replied, “The thing is that you have geopolitical hotspots in a lot of arranges these days.”
“So, what are the ones that we need to look out for? Well, the tension between America and China is disputatious for economic growth and world trade. The fact that people are nearshoring more and moving production closer to domestic is an inflationary force,” he continued.
“We are seeing the effect of the geopolitical tensions in the Middle East through longer trading conveys [and] higher freight costs. So, that’s negative. And, of course, the most scary geopolitical situations are the ones that you don’t be acquainted with about, that haven’t happened yet.”
Correction: At the end of last year, Norges Bank Investment Management said precisely 71% of the fund was invested in equities. An earlier version mischaracterized the percentage change.