Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund, reported a first-half profit of 1.48 trillion kroner ($138 billion) on Wednesday, driven by strong returns from technology investments. The fund’s total value reached 17.75 trillion kroner by the end of June.

Despite an impressive overall return of 8.6% for the six-month period, the fund’s performance slightly lagged behind its benchmark index by 0.04 percentage points. Nicolai Tangen, CEO of Norges Bank Investment Management (NBIM), attributed the fund’s success primarily to its investments in technology stocks, which benefited from heightened demand for artificial intelligence solutions.

“The result was mainly driven by the technology stocks, due to increased demand for new solutions in artificial intelligence,” Tangen explained.

The fund’s equity portfolio achieved a notable return of 12.5% during the first half of the year. However, its fixed income and unlisted real estate portfolios experienced minor losses. Particularly concerning were the negative returns of 17.7% on its unlisted renewable energy infrastructure investments, which were impacted by higher capital costs.

Looking forward, Tangen expressed caution about the future performance of stock markets, noting that they might not experience the same growth rates seen in previous years. “There is a lot of uncertainty and a completely different geopolitical situation,” Tangen said, highlighting the increased risks associated with global stocks.

Established in the 1990s to manage the surplus revenues from Norway’s oil and gas sector, the sovereign wealth fund has invested in over 8,700 companies across more than 70 countries worldwide.

(Adapted from ChannelNewsAsia.com)