(Jan 29): Norway’s US$2.2 trillion ($2.8 trillion) sovereign wealth fund reported its best return in two years, largely thanks to gains in technology and financial companies.
Norges Bank Investment Management saw investments rise by 15.1% last year, driven by a 19.3% gain in equities with other asset classes also growing, it said in a statement on Thursday. Still, NBIM missed the benchmark it measures itself against by 28 basis points last year, a third consecutive year of underperformance.
“Stocks in technology, financials and basic materials stood out, making a significant contribution to the overall return,” chief executive officer Nicolai Tangen said in the statement.
A fifth of NBIM’s investments are in technology stocks and 12% in financials. In the second half of the year, the fund trimmed its stakes in the biggest US tech firms, and its largest holdings now include Nvidia Corp, Apple Inc, Microsoft Corp, Alphabet Inc, and Amazon.com Inc.
The fund holds about 1.5% of all listed shares globally across about 7,200 companies, making it the world’s largest sovereign wealth investor.
Fixed income returned 5.4% and investments in unlisted real estate 4.4%. Unlisted renewable-energy infrastructure returned 18.1%, NBIM said. Its biggest bond holdings were US Treasuries, Japanese government bonds and German bunds.
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Founded in the early 1990s, NBIM invests in line with a benchmark index set by Norway’s finance ministry and its scope for active moves is limited. Its portfolio spans equities, fixed income, real estate and renewable infrastructure, all outside Norway.
The fund holds more than half of its value in the US, mostly in equities and bonds. Soured relations over the past weeks between Europe and the US, including the threats by US President Donald Trump to take over Greenland, have caused some experts to question NBIM’s geographical concentration.
This week, a government-appointed expert panel specifically told the fund to prepare for growing geopolitical turmoil, citing US administration linking import tariffs to its desire to annex Greenland, while also advising not to restrict the fund’s investment universe.
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Norway has also been a target for Trump, who has expressed disappointment in not being awarded the 2025 Nobel Peace Prize, which he blames on the government. The prize is decided by an independent committee.
The value of the fund increased by 1.5 trillion kroner in 2025 to 21.3 trillion kroner at the end of the year.
The fund also ran annual stress tests, estimating potential fallout from various adverse scenarios.
It projects a total decline of 37% for the fund’s portfolio under the scenario where the world fragments into multiple distinct economic blocs due to a worsening geopolitical environment. This would exceed the fallout from an AI correction scenario, where the drawdown is projected at 35%, or a regional debt crisis, which would cut the fund’s value by 32%.
Elements of all those scenarios appeared last year, but didn’t spiral into full-blown crises, the fund said.
“This does not mean that these risks have passed, but rather that they have not yet escalated,” it said.
Uploaded by Magessan Varatharaja
