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Norway sovereign wealth fund posts record $185B returns, urges AI caution

The fund returned 11.5% in the second quarter, with equities up 16% while fixed income rose 1.1%.

Reported · Written up by our desk · Emerging Markets

Norway’s sovereign wealth fund, managed by Norges Bank Investment Management, reported record investment returns of $185 billion for the first half of the year as it recovered from heavy losses earlier in 2023, according to LiveMint Markets. The $2.3 trillion fund said the first-half results were driven by gains in equities after a weak start to the year.

In the second quarter, the fund returned 11.5%, its best quarterly performance since the second quarter of 2020. Equities contributed a 16% return, while fixed income rose 1.1%, and unlisted real estate and infrastructure each returned 1.8% over the quarter.

CEO Nicolai Tangen said the rally has made the fund more cautious, pointing to AI valuations and geopolitical risks. Tangen noted the fund is invested across about 7,100 companies globally and owns around 1.5% of all listed companies worldwide.

Tangen added that concentration is rising because the fund’s value is driven by a smaller number of stocks, with its top holdings making up nearly 25% of total value. He also referenced prior warnings that an AI bubble could cost the world’s largest wealth fund as much as 35% of its value, while geopolitical risks could wipe out up to 37% in a worst case scenario.

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