Tech Stocks Lead Norway’s Pension Giant to 6.3% Return in Q1

Strong gains from equities helped Norway’s sovereign wealth fund return 6.3% during the first quarter of the year to help raise its asset value to $1.6 trillion, larger than any pension fund in the world. Despite the robust gains, the performance fell just short of its benchmark’s return of 6.4%.

“Our equity investments had a very strong return in the first quarter, particularly driven by the tech sector,” Deputy CEO Trond Grande said in a statement.

The Government Pension Fund Global, also known as the “Oil Fund,” because it is funded by revenue generated by Norway’s North Sea oil fields, increased in market value by more than 1.95 trillion kroner ($176.7 billion) during the quarter ended March 31 to just under 17.72 trillion kroner. Approximately 1.21 trillion kroner of that was from its investment gains.

Norges Bank Investment Management, which manages the pension giant, said that currency movements, particularly the weakening of the krone against several main currencies, increased the fund’s value by 647 billion kroner, while fund inflows added 96 billion kroner.

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The pension fund’s equity investments returned 9.12% during the quarter and were the only asset class not to decline in value during the three-month period. The portfolio’s fixed-income investments lost 0.35% during the quarter, while its unlisted real estate holdings lost 0.54%.

The GPFG’s unlisted renewable energy infrastructure assets were the biggest drag on the portfolio, losing 11.39% during the quarter. However, this had little impact on the quarterly results as the assets only account for approximately 0.1% of the entire portfolio.

As of the end of March, the pension fund’s asset allocation was 72.1% equities, 26.0% fixed income, 1.8% in unlisted real estate, and 0.1% in unlisted renewable energy infrastructure. It also reported a 10-year annualized return of 7.19% and an annualized return of 6.28% since the start of 1998.