Norway’s sovereign wealth fund, the largest of its kind globally, reported a record-breaking annual profit of 2.5 trillion kroner ($222.4 billion) for 2024, driven by a strong performance in the technology sector. Managed by Norges Bank Investment Management (NBIM), the fund posted a return on investment of 13% for the year, despite slightly underperforming its benchmark index by 45 basis points.
The impressive profit was primarily fueled by the boom in U.S. tech stocks, particularly in the wake of artificial intelligence advancements. As noted by NBIM CEO Nicolai Tangen, “The fund achieved very good returns in 2024, thanks to a strong stock market, especially American technology stocks.” The positive returns were also attributed to higher interest rates, which benefited the financial sector.
At the end of 2024, the Government Pension Global Fund was valued at 19.7 trillion kroner, with equities making up 70% of the fund’s benchmark index. The fund’s investments span over 8,000 companies across 63 countries, including major players like Apple, Microsoft, Nvidia, and Amazon. In addition to stocks, the fund is also heavily invested in bonds, real estate, and renewable energy infrastructure.
While the AI-driven surge in tech stocks has been a key driver, recent developments in the AI space, such as the release of a new AI model by Chinese lab DeepSeek, caused some volatility in the tech market. This sparked a sell-off on Wall Street, particularly affecting Nvidia, in which Norway’s fund holds a 1.3% stake. Despite the dip, Tangen viewed the emergence of cheaper AI models as a positive for the broader AI market, promoting greater accessibility and global penetration of the technology.
Looking ahead, while NBIM remains cautious about short-term market fluctuations, the fund’s robust performance in 2024 underscores the potential of tech investments, particularly in the evolving AI sector.
Sources: Norges Bank Investment Management, Cnbc, Reuters, Xinhua News Agency
Stocktrading Photo by Reuters, screenshot from fund website
