World’s largest sovereign wealth fund made $76 billion profit in third quarter

Norway’s national wealth fund reported a third-quarter profit of 835 billion Norwegian kroner ($76.3 billion), citing a spike in the stock market by falling interest rates.

Stocks, which accounted for 71.4% of the portfolio, returned 4.5% in the third quarter. The fixed-income investments comprised 26.8% of the fund’s assets and yielded a 4.2% return for the period.
Norway established the world’s largest sovereign wealth fund in the 1990s to invest the surplus earnings from its oil and gas sector. The fund has invested in more than 8,760 companies across 71 countries.

The fund with a quarterly return of 4.4% underperformed a benchmark index created by Norway’s Finance Ministry by 0.1 percentage points. The fund measures itself against the Bloomberg Barclays indexes for fixed income and the FTSE Global All Cap index for stocks.

The largest sovereign wealth fund in the world is managed by Norges Bank Investment Management (NBIM), whose deputy CEO, Trond Grande, stated that recent monetary policy adjustments had “a pretty significant impact” on the fund’s third-quarter performance.

The findings follow NBIM’s warning of greater dangers to global markets due to increased uncertainty and a “completely different geopolitical situation.”

Major central banks are attempting to moderate their hardline monetary policy postures as inflation declines in many high-income nations, signaling the beginning of a global easing cycle.

Last month, the U.S. Federal Reserve implemented a half-percentage-point decrease in the jumbo interest rate. Last week, the European Central Bank decreased interest rates for the third time this year, while the Bank of England did so for the first time since the August coronavirus pandemic.