Norway wealth fund up $26b on stock rally

Norway’s $970 billion (Dh3.56 trillion) sovereign wealth fund returned 2.6 per cent in the three months through June, climbing for a fifth consecutive quarter as optimism over global economic growth boosted stock markets.

The fund’s return was 202 billion crowns ($26 billion; Dh94 billion), it said in a statement handed out in Oslo yesterday.

Its stock portfolio rose 3.4 per cent, bonds gained 1.1 per cent and real estate holdings 2.1 per cent.

“The stock markets have performed particularly well so far this year and the fund’s return in the two first quarters was 6.5 per cent. This gives a return of 499 billion crowns, which is the best half-year return measured in Norwegian kroner in the history of the fund,” said Trond Grande, deputy chief executive officer of Norges Bank Investment Management, in a statement.

“We cannot expect such returns in the future. The record high return is primarily due to the fact that the fund has become so large.”

Owning 1.3 per cent of global stocks, the Norwegian fund largely follows indexes but is allowed some active management of its portfolio. It has been expanding more into emerging markets and recently got permission to raise its stock holdings to 70 per cent of its portfolio to boost returns after Norway last year started withdrawing cash from the fund for the first time.

It held 65.1 per cent in stocks in the quarter, 32.4 per cent in bonds and 2.5 per cent in properties.