Norway's sovereign wealth fund returns to a new high since the end of 2023, betting on technology by reducing its holdings in oil and gas giants.

Norway's sovereign wealth fund delivered an impressive report card in the second quarter. The report released by the Norwegian Bank Investment Management (NBIM) on Tuesday showed that the world's largest sovereign wealth fund achieved a return rate of 6.4% for the quarter, marking its best quarterly performance since the end of 2023. With a fund size of $1.9 trillion, its performance was primarily driven by equity investments, with a return rate of 8.45% for equity assets in the quarter. Significant returns were contributed by non-listed infrastructure investments, with a return rate of 8.1%, while fixed income and non-listed real estate also brought in slight positive returns. As the sovereign fund with the highest proportion of listed equity holdings globally, around two-thirds of its assets are allocated to the stock market, all invested outside of Norway. Its holdings cover approximately 8,700 listed companies in 44 countries, with a focus on major US technology companies such as Apple Inc., Microsoft Corporation, NVIDIA Corporation, Alphabet Inc., Amazon.com, and Meta among others in its investment portfolio. The fund reduced its holdings in oil and gas giants such as Exxon Mobil Corporation and Chevron Corporation, decreasing its stake in Exxon Mobil Corporation from 1.46% at the end of 2024 to 1.32%. At the same time, its second-largest energy holding, Shell, saw its stake decrease from 2.78% to 2.55%, with reductions in holdings in Chevron Corporation, BP, and TotalEnergies as well. Energy stock holdings yielded an overall return rate of 6.3% in the first half of 2025, accounting for 2.9% of its equity investment portfolio. Although oil prices surged in June due to the conflict between Israel and Iran, they experienced a decline in the first half of the year. US President Trump's trade policies and OPEC+ member countries' continued efforts to increase production quotas put pressure on energy demand outlook and raised concerns about oversupply. In terms of regional performance, European stock markets were the standout performers in the first half of the year, leading globally with a 17.8% increase, while North American stock markets only rose by 1.4% during the same period. The fund's CEO, Nicolai Tangen, highlighted the strong performance of the financial sector as a key driver of returns, with a 16.5% return rate in the first half of the year, accounting for 17% of its equity investments. European banks benefited from expectations of increased public spending and improved profitability, along with the telecom and utility sectors, while the healthcare industry showed relatively weak performance. It is worth noting that currency factors exerted pressure on the fund's value. Despite significant investment returns, the strengthening of the Norwegian krone led to a 0.8% decrease in the fund's total value from the beginning of the quarter, ultimately settling at 19.6 billion Norwegian krone (approximately $1.9 trillion). This result contrasts with the fund's overall return rate of 5.7% in the first half of the year, which is 5 basis points lower than the benchmark index. Established by the Norwegian government in the early 1990s as the "Oil Fund," NBIM has always followed the benchmark indices set by the Ministry of Finance for passive investment, with limited room for active management. Its equity investments track the FTSE Global All Cap Index, while the fixed income portion refers to the Bloomberg Barclays Index, with a 70% allocation to government bonds and 30% to corporate bonds. The fund has recently faced controversy due to investments in companies involved in the Israel-Gaza conflict. Under public pressure, the fund has terminated all cooperation with external managers in Israel and has withdrawn investments from 21 Israeli companies since the outbreak of the conflict. Tangen stated in a press conference on Tuesday that he has no plans to resign and acknowledged that the fund should act more promptly in reclaiming management control over controversial assets. This quarterly report not only reveals structural opportunities amidst global stock market volatility but also reflects the sovereign wealth fund's balancing act between political and ethical investments, as seen in its investments in GEO Group Inc. The transition from oil wealth to global capital, the Norwegian model continues to evolve.