ARENDAL, Norway (Reuters) – Norway’s sovereign wealth fund, the world’s largest investment fund with capital of $1.7 trillion, expects lower returns as financial markets slump, its chief executive Nicolai Tangen said on Wednesday.
The sovereign wealth fund, which invests the Norwegian state’s revenues from oil and gas production, owns an average of 1.5% of all listed shares in the world. It also invests in bonds, unlisted real estate and renewable energy projects.
Its first-half profit amounted to 1,480 billion Norwegian crowns (126 billion euros), driven by the good performance of the indices over the period.
“When you look at how the fund has developed, it looks good (…) But it will not continue like this,” Nicolai Tangen said at a press conference.
“This is not how stock markets work in the long term. There is a lot of uncertainty in the world and we are in a completely different geopolitical situation,” he said, adding that there are “more risks to stock markets today than ever before.”
The fund’s equity portfolio returned 12.5% ​​over the January-June period, while fixed income and real estate assets suffered losses of 0.6% and 0.5% respectively.
“The result is mainly related to technology stocks, due to the increased demand for new solutions in the field of artificial intelligence,” Nicolai Tangen said in a statement.
The fund’s most profitable holdings are Microsoft, valued at 453.8 billion crowns at the end of June, followed by Apple (390.8 billion crowns) and NVIDIA (377 billion crowns).
(Report by Gwladys Fouche in Arendal, by Augustin Turpin, edited by Kate Entringer)
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