In 2024, Norway’s sovereign wealth fund, the world’s largest with assets totaling $1.8 trillion, reported a record annual profit of 2.51 trillion Norwegian crowns ($222 billion). This milestone was primarily driven by significant gains in U.S. technology stocks, marking the second consecutive year of record profits and surpassing the 2.2 trillion crowns earned in 2023. The fund’s CEO, Nicolai Tangen, highlighted the pivotal role of American tech giants, noting that by the end of 2024, nine of the fund’s top ten equity holdings were tech companies, with Apple, Microsoft, and Nvidia leading the list. The fund achieved a 13% return on investments in 2024, slightly below its benchmark index. While equity investments yielded an 18% return, investments in unlisted real estate and renewable energy infrastructure experienced negative returns of 1% and 10%, respectively. Asset allocation at year-end was predominantly in equities (71.4%), followed by bonds (26.6%), unlisted real estate (1.8%), and renewable energy infrastructure (0.1%). Despite these impressive gains, Tangen cautioned that such exceptional returns might not be sustainable in the future. He also emphasized the importance of diversification, acknowledging the risks associated with high market concentration in the tech sector. Nevertheless, the fund does not plan significant portfolio changes at this time. Established in 1996 to manage Norway‘s oil and gas revenues, the fund has diversified its investments across equities, bonds, real estate, and renewable energy. Its substantial holdings in major U.S. tech companies have been a significant contributor to its recent record profits.
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