Norway wealth fund gives $21b return on US stocks

Norway’s $1 trillion (Dh3.67 trillion) wealth fund’s US stock holdings helped lift returns as it struggles to navigate increasingly turbulent markets amid disputes over trade and slowing economic momentum.

The Oslo-based fund posted a gain of 2.1. per cent, or $21 billion, in the third quarter. North American stocks gained, while the rest of the global equity markets had a weaker development, the fund said. “The market development was affected by expectations of differing economic growth and uncertainty about the effects of increased trade barriers,” Yngve Slyngstad, the fund’s chief executive officer, said in a statement.

Owning on average about 1.4 per cent of all global stocks, the fund has few places to hide, given its strategy of hewing closely to indexes and spreading its investments broadly across world markets. It’s now facing increasing headwinds after years of high returns, with a potential for losses this quarter.

The fund gained 3.1 per cent on stocks and lost 0.3 per cent on bonds, while real estate gained 1.9 per cent. At the end of the quarter, it held 67.6 per cent in stocks, 29.7 per cent in bonds and 2.7 per cent in real estate. Overall return was 0.2 percentage point lower than the return on benchmark index. Health care stocks made the most positive contribution to returns, followed by tech.