Norway's $893-billion sovereign wealth fund, the world's biggest, swung to a positive return in the second quarter led by gains in its fixed-income portfolio, it said on Wednesday.
The fund earned a return of 1.3 percent in the quarter, lagging its benchmark by 0.1 percentage points. In the first quarter the fund booked a loss of 0.6 percent.
"After a period of relatively stable markets at the beginning of the quarter, the British decision to leave the EU sparked a sharp decline in Europe. Markets recovered relatively quickly, but with major variations between sectors.
Financials, for example, performed weakly," deputy CEO Trond Grande said in a statement.
The fund's bonds portfolio gained 2.5 percent in the period, while equities returned a positive 0.7 percent and the real estate portfolio returned a negative 1.4 percent.
"The fund's fixed-income investment received price gains due to falling interest rates. In the long term, however, lower interest rates have negative implications for future returns on the fixed-income portfolio," said Grande.
The government withdrew 24 billion Norwegian crowns ($2.93 billion) during the quarter to pay for public expenses at a time of declining oil and gas revenues, against 25 billion crowns in the first quarter.
The fund raised its share of fixed income investments in the quarter to 37.4 percent of its portfolio from 37.0 percent three months earlier while equity investments fell to 59.6 percent from 59.8 percent.
Real estate holdings were unchanged at 3.1 percent of the total.