The Norwegian sovereign wealth fund invests in Microsoft, Apple and Nvidia. picture alliance / NurPhoto | Arthur Widak
The Norwegian sovereign wealth fund recorded a record profit of 2.22 trillion crowns (196 billion euros) in 2023, driven primarily by technology stocks.
CEO Nicolai Tangen emphasized that improved economic prospects and low interest rates contributed to this success.
Despite the positive development, geopolitical risks such as the disruption of shipping in the Red Sea and the war in the Middle East remain risks that the fund is keeping an eye on.
A record profit: the Norwegian sovereign wealth fund reports a profit of 2.22 trillion crowns (196 billion euros) for 2023, reports “Reuters”. The high profit exceeds the loss from the previous year in 2022, which was 1.64 trillion crowns (65 billion euros). Both the gains and losses were driven primarily by technology stocks.
Both the AI breakthrough as well as the improved economic outlook and the expected low interest rates drove the profits, according to the sovereign wealth fund, which is the largest sovereign wealth fund in the world with 1.5 billion euros. “The year 2023 ended much better than expected,” CEO Nicolai Tangen said at a press conference. The sovereign wealth fund achieved a return of 16.1 percent last year.
A full 70.9 percent of the fund’s assets were invested in stocks at the end of the year. For comparison: in 2022 it was 69.8 percent. The fund’s most valuable company holdings include Microsoft, Apple and Nvidia. The most valuable non-tech stock was pharmaceutical company Novo Nordisk. The Norwegian sovereign wealth fund separated from Chinese real estate giant Evergrande in 2021, whose crisis was long overdue, according to the fund CEO.
Speaking to Reuters, Tangen further explained that the disruption to shipping in the Red Sea could affect global trade through higher energy prices and inflation. However, the effect will remain “relatively limited”. Norway, Europe’s largest gas supplier, benefited from high energy prices after Russia’s invasion of Ukraine. The expansion of the war in the Middle East is “one of many risks that we are keeping an eye on,” said Tangel.
AA