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For the first time in its nearly three-decade history, Norway’s oil fund, the world’s largest sovereign wealth fund, has just exceeded the market value of 18 trillion Norwegian crowns, which equals $1.691 trillion as of Wednesday.
Government Pension Fund Global, as the Norwegian fund is officially known, was created in the 1990s and the government started transferring revenues from Norway’s oil and gas industry into the fund in 1996.
Since then, the fund has invested in equities and fixed income globally, raising its value with the returns.
In October 2019, the value of the fund exceeded 10 trillion Norwegian crowns and in May 2023, the fund’s market value topped the threshold of 15 trillion Norwegian crowns.
The weak Norwegian crown against the U.S. dollar has contributed somewhat to the new height of the fund’s value, but it is the equity investments in the U.S. stock market, in which the fund is heavily weighted, that have driven the record value, Nils Kristian Knudsen, an analyst at Handelsbanken, told Norwegian outlet FinansWatch.
For the first quarter of 2024, the fund returned 1.21 trillion crowns ($113 billion), which was the highest quarterly return in absolute terms since the fund was set up in 1996.
“Our equity investments had a very strong return in the first quarter, particularly driven by the tech sector,” Trond Grande, Deputy CEO of Norges Bank Investment Management, said in April, commenting on the fund’s performance in Q1.
The Norwegian fund owns on average 1.5% of all listed companies globally. The equity investments – which account for 72.1% of the fund’s total investments – consist of ownership shares in about 9,000 companies worldwide. A total of 26% of the fund’s assets are invested in fixed income, 1.8% in unlisted real estate, and 0.1% in renewable energy infrastructure.
The fund, which is commonly referred to as ‘Norway’s oil fund’ because it was created with oil and gas revenues, is a shareholder in many large companies in the world, including Big Oil, and has the power to influence other investors with its investment decisions.
As of the end of 2023, they held stakes in 220 energy firms in 35 countries, representing 2.6% of all investments. The fund held 3.4% in BP, 2.88% in Shell, 2.42% in TotalEnergies, 1.35% in ExxonMobil, and 1% in Chevron.
