Markets

US tech stocks push Norway's $1 trillion oil fund to best ever gains

Key Points
  • The world's largest sovereign wealth fund just had its best quarter ever.
  • US tech stocks were the main driver of gains.
  • The Norwegian Sovereign wealth fund took the opportunity to buy up stocks in the final two months of 2018.
A visitor looks out towards a flare stack on the Oseberg A offshore gas platform operated by Statoil ASA in the North Sea 140kms from Bergen, Norway.
Kristian Helgesen I Bloomberg via Getty Images

The world's largest sovereign wealth fund just posted its most successful quarterly return ever.

Norges Bank, which manages Norway's $1 trillion oil-funded wealth pot, said a strong recovery in global stock markets across the first three months of 2019 had generated a 9.1% return overall. In Norwegian krone terms it was the investor's largest ever increase at 738 billion Norwegian krone ($84 billion).

The Government Pension Fund Global, as it is officially known, currently sits at around $1.05 trillion in overall value. The aim of the fund is to ensure a future source of wealth from current revenue derived from Norway's oil and gas sales.

As of March 31, 2019, the fund was invested 69.2% in equities, 2.8% in unlisted real estate and 28% in fixed income.

The fund's largest equity holdings as of the end of March were in Apple, Microsoft, Google-parent Alphabet and Amazon. According to Norges Bank, those tech stocks were the bulk of the strongest-performing sector for the fund, returning 17.6% in growth during the quarter.

In its report, Norges Bank said oil and gas stocks as well as industrials also performed strongly.

"This is the fund's best quarterly return measured in krone ever. As a major equity investor, we must be prepared for large fluctuations in the fund's market value in line with developments in global stock markets," said Yngve Slyngstad, CEO of Norges Bank Investment Management, in a press release Friday.

The oil fund's performance marked a reversal from the last three months of 2018 when the fund posted its largest ever drop in krone value.

During that spell of market turmoil, Norges Bank went on a stock buying spree, taking advantage of dipping prices to buy stocks worth 185 billion krone.