Norway's sovereign wealth fund said on Wednesday that it made a profit of 1.48 trillion kroner (approximately 138 billion dollars) in the first half of 2024, benefiting from the AI boom and the resulting rise of technology stocks. However, the fund warned that investment returns may decline in the future due to market uncertainty and increasing risk levels.

Norway's sovereign wealth fund, which manages huge funds of 1.7 trillion USD, is the world's largest sovereign wealth fund. The fund is operated by the Norwegian Government Pension Fund Global (GPFG), managed by NBIM, and Nicolai Tangen is the CEO of NBIM.

"When you look at the development of the fund, it looks pretty good...but it's not the way the stock market operates over the long term," Tangen said at a news conference on Wednesday.

He warned that there is a lot of uncertainty in the world and the stock market is facing increasingly more risks in a completely different geopolitical situation.

After experiencing a strong upward trend in the first half of the year, the global stock market has begun to decline in recent weeks and is still volatile. The prospect of a US economic recession, as well as lackluster performance by tech giants such as Amazon, Microsoft, and Alphabet, have intensified volatility.

Overall, Norway's sovereign wealth fund achieved a return rate of 8.6% in the first half of the year, equivalent to 1.48 trillion kroner, which lagged behind the global equity benchmark index, mainly due to losses in real estate investments.

The report showed that the fund's equity investments achieved a very strong return rate in the first half of the year, with an investment return rate of 12.5%; however, the fixed-income investment return rate was -0.6%, the unlisted real estate investment return rate was -0.5%, and the wind power infrastructure return rate was -17.7%.

The latest position data shows that the sovereign wealth fund slightly reduced its holdings in Meta, Novo Nordisk, and ASML Holding in the first half of this year. These three companies are all among its top ten holdings.

Data shows that the proportion of Meta shares held by Norway's sovereign wealth fund has decreased from 1.22% at the end of 2023 to 1.18%, with a value of approximately $15.1 billion as of mid-year. During the same period, the proportion of Novo Nordisk shares held by the fund decreased from 1.87% to 1.75%, while the shareholding of ASML decreased from 2.61% to 2.54%. In addition, the fund reduced its holdings of Tesla and Volkswagen stocks.

While reducing its holdings of technology and auto stocks, Norway's sovereign wealth fund has shown new interest in energy stocks. The fund increased its holdings of shares in three major energy companies - Exxon, Shell, and BP plc.

As of the end of June, the fund's top three holdings were Apple, Microsoft, and Nvidia. So far, the fund has invested in more than 8,700 companies in over 70 countries around the world.

Editor/Lambor