Norwegian Sovereign Wealth Fund Reports 11.5% Return in Q2, Best Performance Since 2020

The Norwegian Sovereign Wealth Fund reported a return of 11.5% for the second quarter, marking its best quarterly performance since 2020. The fund, which is approximately $2.3 trillion in size, is managed by the Norwegian central bank's investment management unit, NBIM. Technology stocks were the main driving force, with equity investments returning 16% in Q2, fixed income returning 1.1%, and investments in unlisted real estate and infrastructure both returning 1.8%. As of the end of the first half, Nvidia was the largest holding, followed closely by Microsoft and Apple. Fund CEO Nicolai Tangen stated that chips have driven the fund's value at an unprecedented scale, with the fund holding about 1.5% of global listed stocks, making it one of the largest investors in AI-related companies worldwide. For the first half of the year, the fund's return rate was 9.4%, exceeding the benchmark index by 22 basis points, and in Norwegian krone terms, it was also one of the best-performing halves in the fund's history. The main contributors were the communication, technology, and energy sectors. Tangen pointed out that the top ten holdings accounted for 20% of the fund's value, with U.S. assets making up 55%. Due to the fund's need to closely track the benchmark index, there is limited room for active adjustments. The fund has also expanded its use of AI tools, utilizing large language models to screen companies newly added to the portfolio to identify governance, corruption, and human rights risks. The fund faces ethical guidelines debates domestically in Norway, currently holding 29 Israeli companies, with management stating that these companies meet existing ethical requirements. The Norwegian parliament requested a review of the relevant guidelines last year, with the review expected to conclude on October 15.

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