Norway's Sovereign Wealth Fund Misses Target Despite Tech Gains
Norway's $1.8 trillion sovereign wealth fund delivered a 13% return ($222 billion) in 2024, but fell short of its target for the second consecutive year.
Norges Bank Investment Management (NBIM), the fund's official name, reported an 18% gain in equity investments. However, a decline in real estate holdings led to a 45-basis-point underperformance compared to its benchmark.
"American technology stocks performed exceptionally well," said CEO Nicolai Tangen.
Tangen emphasized the importance of contrarian thinking at the World Economic Forum in Davos. He suggested that a second Trump administration fostering deregulation could benefit US companies, while also noting inflationary risks from tariffs and labor restrictions.
NBIM, an index tracker with a strict mandate, seeks to maximize flexibility within its constraints. It holds an average of 1.5% of listed global companies.
Established in the early 1990s, NBIM invests Norway's oil and gas revenues internationally with a long-term perspective. It measures itself against a customized benchmark that includes the FTSE Global All Cap Index for equities and Bloomberg Barclays indexes for fixed income.
The fund saw a 1% gain in fixed-income investments, a 1% loss in unlisted real estate, and a 10% decline in unlisted renewable energy infrastructure.
The Norwegian government deposited 402 billion kroner ($35.6 billion) into the fund in 2024.