Norway wealth fund flags risk to stock markets after posting $138 billion profit

ARENDAL, Norway :Uncertainty and a heightened level of risk to stock markets mean they are unlikely to deliver the returns of recent years, the CEO of Norway’s $1.7 trillion wealth fund said on Wednesday.
The fund, which invests the Norwegian state’s revenues from oil and gas production, is one of the world’s largest investors, owning on average 1.5 per cent of all listed stocks worldwide. It also invests in bonds, real estate and renewable energy projects.
The fund posted on Wednesday a profit of 1.48 trillion Norwegian crowns ($138 billion) in the first half of the year as global stock markets rose.
“When you look at how the fund has developed, it looks fine… But this will not carry on this way,” Nicolai Tangen told a news conference on the fund’s half-year results.
“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 added: “There are more risks to stocks markets now than there was before.”
The fund’s equity portfolio saw a return of 12.5 per cent in the period from January to June, while its fixed income and real estate assets incurred losses of 0.6 per cent and 0.5 per cent respectively.
“The result was mainly driven by the technology stocks, due to increased demand for new solutions in artificial intelligence,” Tangen said in a statement.
The fund’s 1.28 per cent stake in Microsoft was the single most valuable holding, worth 453.8 billion crowns at the end of June, followed by a stake in Apple valued at 390.8 billion crowns and NVIDIA at 377 billion crowns.
While the fund’s overall return was 8.6 per cent in the first half of the year, it slightly underperformed its own benchmark index.
Its small portfolio of unlisted renewable energy infrastructure posted an 18 per cent loss in the first-half of 2024, it said.
($1 = 10.7122 Norwegian crowns)