The world's largest sovereign wealth fund, Norway's $1.3-trillion wealth fund, enjoyed last year its second-best return in history, earning the equivalent of $176 billion, driven by technology and financials, while energy stocks globally made the strongest return last year.
The Government Pension Fund Global, as the so-called 'oil fund' is officially known, said on Thursday that it returned 14.5 percent, equivalent to $176 billion (1.58 trillion Norwegian crowns) last year. This was the second-best return ever for the world's biggest sovereign wealth fund, after a record return in 2019.
The fund-created three decades ago to safeguard and manage Norway's oil wealth for future generations-returned 20.8 percent on its equity investments, thanks to rallying equity markets last year.
"The good results are mainly due to very strong developments in the equity market throughout the year. There was good return in all sectors, but the investments in technology and financials performed particularly well. The investments in technology returned an impressive 30.2 percent", Nicolai Tangen, CEO of Norges Bank Investment Management which manages the fund, said in a statement.
The fund's investments in tech giants such as Microsoft, Alphabet, and Apple, contributed the most to absolute return numbers, while Tesla was also among the top ten individual contributions to absolute return, the fund's presentation showed.
While Norway's fund enjoyed very good returns last year, Norway itself generated record-high petroleum revenues, thanks to rising commodity prices, growing global demand, and high production from 94 offshore fields, the Norwegian Petroleum Directorate (NPD) said earlier this month.
Going forward, Norway will continue to develop its oil and gas industry under the new minority government led by Labour Party leader Jonas Gahr Stoere.
Norway will continue to grant permits for oil and gas exploration on the Norwegian shelf and will keep the current system of oil auctions, the government says.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More