Norway's sovereign wealth fund - $109.9 billion profit in first quarter, boosted by technology investments

Norway's sovereign wealth fund, the world's largest investment vehicle of its kind, reported a profit of $109.9 billion (1.21 trillion kroner) for the first quarter of the year, thanks to returns on its investments in technology stocks, according to CNBC. At the end of March, the fund was worth 17.7 trillion Norwegian kroner ($1.61 trillion), according to reports.

The fund characterized the relative return achieved in the first three months of the year as "good" for its investments in equities and fixed income instruments, but pointed out that "this was offset by weak results in real estate, which led to a overall negative result (n.r. in relative decrease)". The fund's equity investment return in the first quarter was 9.1%, while fixed income investment return was -0.4% and unlisted real estate investment return -0.5 %. The return on unlisted renewable energy infrastructure holdings was -11.4%. Overall, the fund's return was 0.1 percentage points below that of the benchmark, writes CNBC.

Norway's sovereign wealth fund was established in the 1990s to invest the country's surplus profits from the oil and gas sector, and to date has placed resources in more than 8,800 companies in more than 70 countries worldwide.

Trond Grande, deputy CEO of Norges Bank Investment Management, the manager of the fund, said that equity investments had "a very strong return in the first quarter, driven in particular by the technology sector". "We had "magnificences" last year, which led to slightly more dispersed returns for the seven names this quarter, with Nvidia still moving ahead on AI excitement. We saw some weakness in names like Tesla and Apple," Grande said on CNBC yesterday. "Obviously, the market has a more nuanced perspective on these companies and their business models."

The "magnificent seven", the name given to the technology companies in particular that dominate the American market, are: Alphabet (parent company of Google), Amazon, Apple, Meta Platforms (formerly Facebooke), Microsoft, Nvidia, and Tesla.

At the Bucharest Stock Exchange, at the end of last year, the Sovereign Fund of Norway had investments in shares of Aquila, Banca Transilvania, Digi Communications, MedLife, OMV Petrom, Hidroelectrica and Sphera Franchise Groupe, as well as bonds issued by real estate developer Globalworth, according to available information on the fund's website.