Norway’s wealth fund returned $45.7b in Q1

Bloomberg

Norway’s sovereign wealth fund, the world’s biggest, returned 4%, or 382 billion kroner ($45.7 billion), in the first quarter after gains in its stock portfolio made up for bond losses.
“The rise of the equity market was to a great extent driven by the finance and energy sector,” Deputy Chief Executive Officer Trond Grande said in a statement on Wednesday. The world’s biggest stock owner has said it wants to rely more on
US equities given the growth outlook.
The fund’s total value stood at $1.32 trillion at the end of March. The appreciation of the krone, the best-performing G-10 currency this year, shaved 178 billion kroner off its overall value in the quarter. The government withdrew 83 billion kroner in the period.
Chief Executive Nicolai Tangen, a former hedge-fund manager who’s been running the Norway’s giant sovereign investment vehicle since September, has started relying more on external asset managers to help squeeze out higher returns.
The 54-year-old says he’s also keen to make sustainability a priority, and the fund has stepped up divestments based on risks tied to environmental, social and governance metrics.
The Oslo-based fund’s performance was 24 basis points more than the benchmark set by the country’s finance ministry. Equity investments gained 6.6%, fixed-income fell 3.2% while unlisted real estate returned 1.4%.
Last year, the fund returned 10.9%, or $123 billion, its second-best result in over two decades. Tangen has already warned that will be difficult to replicate and said asset prices are benefiting from extreme stimulus that can’t continue forever.
Created in the 1990s to invest Norway’s oil and gas revenues abroad, the fund delved into renewable infrastructure for the first time earlier this year, as it expands the list of asset classes it holds from stocks, bonds and real estate. Norway’s government also wants the fund to shed more than 2,000 companies as part of a proposal designed to ensure it’s not exposed to climate or social risks, particularly in emerging markets.