Funds|The success of technology companies brought the Norwegian oil fund EUR 125 billion in profits in the first half of the year. However, the CEO is concerned about the impact of government debt on the market
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Norway’s oil fund achieved a return of 8.6 percent in H1.
Technology stocks supported returns.
Weak returns from bonds, the real estate sector and renewable energy projects acted as a slowdown.
The CEO of the fund is worried about the growing debt of the states.
Norwegian the huge oil fund worth 1.5 trillion euros said it achieved a return of 8.6 percent in the first half of the year, which means about 125 billion euros.
The yield was boosted by technology stocks strengthened by the artificial intelligence drug owned by the fund.
The slowdown was the weak returns of bonds, the real estate sector and renewable energy projects, which is why the fund’s total return fell short of the target by 0.04 percentage points.
The news agencies reported on it Reuters and Bloomberg.
Fund managing director Nicolai Tangen does not believe that similar gains can be expected in the future. According to him, there are more risks in the market than before, one of the key ones being the growing debt of the states, he told the press conference.
“We are concerned about it because it is at a level we have not seen before. It continues to grow, and there seems to be very little willingness in the world to actively reduce it,” he later continued to Reuters.
Tangen did not want to name individual countries for Reuters, but said the problem affects most countries, including many large ones.
He says that a crisis in the market could start quickly and unexpectedly, as happened in Britain in 2022, when the prime minister Liz Trussin presented mini budget sent the market into turmoil.
Norwegian the fund that invests funds obtained from oil and gas production is one of the world’s largest investors. It owns about 1.5 percent of all listed shares in the world. In addition to that, the fund invests, among other things, in fixed income investments and real estate.
The fund’s success is largely dependent on technology stocks, which make up 26 percent of the company’s stock investments. Nine out of ten of the fund’s largest equity investments are technology companies, including Microsoft, Apple and Nvidia.
According to Tangen, technology companies are risky because they are dependent on each other. Many of the companies need, for example, Nvidia chips to develop their own artificial intelligence products.
On the other hand, Tangen does not see a big risk to the market in the US presidential elections.
“We generally believe that the large U.S. companies we’ve invested in will do well regardless of who wins the election,” Tangen told Bloomberg.
“You’d be surprised how little we think about the US election because we’re invested in US companies and we think both parties are pro-business.”