This follows a record loss of SEK 1.64 trillion for the full year of 2022, which the fund blamed on the “highly unusual” market conditions at the time.
“Despite high inflation and geopolitical turmoil, the stock market will perform very well in 2023 compared to the downturn in 2022,” Nicolai Tangen, CEO of Norges Bank Investment Management, said in a statement. It was,” he said.
“Technology stocks in particular performed very well,” he added.
Norway's sovereign wealth fund, the world's largest, was established in the 1990s to invest surplus profits from the country's oil and gas sector. To date, the fund has funded more than 8,500 of his companies in 70 countries around the world.
Last year, Norges Bank Investment Management announced that the return on equity investments was 21.3%, the return on bond investments was 6.1%, but the return on unlisted real estate was -12.4%.
The fund said the negative year for private real estate investments was due to rising interest rates and weak demand.
The fund returned 3.7% in 2023 by investing in privately held renewable energy infrastructure.
Late last year, Norges Bank Investment Management announced that almost 80% of the fund was invested in stocks, 27.1% in bonds, 1.9% in unlisted real estate and 0.1% in unlisted renewable energy infrastructure.
Asked about geopolitical issues likely to affect stock prices in 2024, Norges Bank Investment Management's Tangen said at a press conference: “The problem is that there are geopolitical hotspots in many places these days.'' That means there is,” he answered.
“So what should we be concerned about? Well, tensions between the US and China are negative for economic growth and global trade. As people increase nearshoring and bring production closer to home, That fact is an inflationary factor,” he continued.
“We are seeing the effects of geopolitical tensions in the Middle East through longer trade routes. [and] Higher freight charges. I mean, it's negative. And of course, the scariest geopolitical situations are the ones you don't know about and haven't happened yet. ”
