From loss to record profit: Norway's wealth fund hits $213B profit in 2023

Norway's sovereign wealth fund reported an unprecedented profit of 2.22 trillion Norwegian crowns, roughly equivalent to $213 billion, in 2023.

Norges Bank Investment Management (NBIM) noted that this exceptional performance marks a drastic recovery from a 1.64 trillion crown loss the previous year.

The Government Pension Fund Global, valued at $1.6 trillion, attributes this record-breaking achievement to its robust investment in technology stocks. Major holdings in Microsoft and Apple played a significant role in this financial success, according to Reuters.

In his statement, NBIM's Chief Executive Nicolai Tangen noted, "Despite high inflation and geopolitical turmoil, the equity market in 2023 was very strong, compared to a weak year in 2022. Technology stocks in particular performed very well."

This solid performance in the tech sector significantly contributed to the fund's overall 16.1% return on investment, which was marginally lower than its benchmark index by 0.18 percentage points.

Originating in the 1990s to manage Norway's oil and gas surplus revenues, the fund has expanded its reach significantly. It now encompasses investments in over 8,800 companies worldwide, owning about 1.5% of all listed stocks. At the end of 2023, 70.9% of the fund's assets were invested in equities, a slight increase from the previous year.

Addressing future concerns, Tangen stated at a news conference, "Well, the tension between America and China is negative for economic growth and world trade. The fact that people are nearshoring more and moving production closer to home is an inflationary force."

He also mentioned the effects of geopolitical tensions in the Middle East on trading routes and freight costs, emphasizing the unpredictability and potential impact of unknown geopolitical events.

Source: Newsroom