World's largest sovereign wealth fund sees €94bn return on investment

Norway's sovereign wealth fund has seen a surge in returns through its investment in tech stocks such as Google owner Alphabet.

Norway’s $1.4 trillion (€1.2tn) sovereign wealth fund, the world’s biggest, generated a 9.4% return in the first half of the year after its investments in energy, finance and technology companies helped drive double-digit gains in its stock portfolio.

Oslo-based Norges Bank Investment Management returned almost 14% on stocks, with energy investments up nearly 20%, it said.

Investments in bonds and renewable energy infrastructure slipped, while real-estate holdings grew.

Its total return, equivalent to roughly $110bn, was marginally higher than that of the benchmark against which it measures itself.

Chief executive Nicolai Tangen, a former hedge-fund manager who’s been running Norway’s giant sovereign investment vehicle for almost a year, has previously cautioned against expecting continued bumper returns.

Earlier this week, he said that inflation is now emerging as the biggest threat to returns with both stocks and bonds potentially vulnerable.

Since Mr Tangen started as CEO, Norway’s wealth fund has spoken more publicly of a commitment to sustainability. The investor plans to step up the pace at which it offloads companies that pose a risk when viewed through an environmental, social or governance lens. It will also limit its exposure to emerging markets as part of the same strategy.

The fund revealed a 16.8% increase in the value of its technology holdings, which are dominated by stakes in Apple, Microsoft, Google owner Alphabet and Amazon.

-Bloomberg