Equities were responsible for all of Norway’s Government Pension Fund Global’s first half investment returns, as the sovereign wealth fund’s investment portfolio gained 2.1% in the second quarter and 8.59% for the first half of 2024. The returns brought its asset value to 17.75 trillion kroner ($1.69 trillion).
Performance for both the second quarter and the first half fell short of the pension fund’s benchmark index by 0.23 and 0.04 percentage points, respectively.
Equities were the top-performing investments for the fund and the only ones that produced positive returns in the first half of the year, gaining 12.47% for the period and 3.07% for the quarter. Fixed-income investments declined 0.27% for the quarter and 0.62% for the first half, and investments in unlisted real estate gained 0.04% for the quarter but were down 0.50% for the half. The worst-performing investments were in unlisted renewable energy infrastructure, which lost 7.11% for the quarter and 17.69% for the first half.
“The equity investments gave a very strong return in the first half of the year,” said Norges Bank Investment Management CEO Nicolai Tangen in a statement. “The result was mainly driven by the technology stocks, due to increased demand for new solutions in artificial intelligence.”
Norges Bank, Norway’s central bank, manages the GPFG on behalf of the Ministry of Finance. According to Norges Bank, it is now reporting its updated holdings list twice annually instead of once per year. As of the end of June, the pension fund’s asset allocation was 72.01% equities, 26.15% fixed income, 1.73% unlisted real estate and 0.11% unlisted renewable energy infrastructure. This compares with 70.88% equities, 27.10% fixed income, 1.91% unlisted real estate and 0.11% unlisted renewable energy infrastructure at the end of 2023.
“We are already the world’s most transparent fund, but now we are increasing transparency even further,” said Tangen. “From now on, everyone will be able to find an updated overview of all our investments on a half-yearly basis.”
Among the equity investments, the tech sector provided the highest first half returns, gaining 27.9% during the period, followed by financials, which were up 13.8%. Combined, the sectors make up more than 40% of the pension fund’s equity investments, with a 25.8% allocation for tech stocks, and a 15% allocation to financials.
Industrial stocks provided an 8.2% return, followed by investments in consumer discretionary, utilities and telecommunications, which gained 7.9%, 6.2% and 5.2%, respectively. Consumer staples and real estate stocks increased 1.4% and 1.2%, respectively, while the GPFG’s basic materials stocks were the only equity investments not to provide gains for the half, declining 0.3%.
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Tags: Equities, Government Pension Fund Global, GPFG, Nicolai Tangen, Norges Bank, Norges Bank Investment Management, Norway, Sovereign Wealth Fund