Norway's Sovereign Wealth Fund Sets Record 2024 Profit
The Norwegian sovereign wealth fund, the world's largest money-making machine, achieved a record profit of 210 billion euros in 2024. This impressive return, more than 13%, significantly outperformed savings accounts. Each of the approximately 5.5 million Norwegian residents could receive about 300,000 euros in calculation. The fund's success comes from its global diversification, including investments in thousands of companies across 63 countries, with two-thirds in stocks.
The fund's origins trace back to the 1960s when Norway discovered North Sea oil and gas reserves. In 1969, the idea of securing oil revenues for future generations was born. Today, managed by Norges Bank Investment Management, the fund's assets have grown to 1.8 trillion USD. Initially a pure bond fund in the early 1990s, it has evolved into a global investor, with top ten stock positions dominated by US technology giants like Apple, Microsoft, Tesla, and Meta.
Since 1996, the fund has invested worldwide in stocks, bonds, and real estate. Its manager, Nicolai Tangen, emphasizes ethical guidelines, but the fund also holds stakes in German defense companies. ETFs were introduced as part of its diversification strategy, providing cost-effective and efficient market exposure. The fund's success has led the Norwegian government to consider withdrawing up to 3% annually to plug budget holes in the pension fund.
The Norwegian sovereign wealth fund's 2024 record profit reflects its global diversification and long-term investment strategy. With assets of 1.8 trillion USD, it remains the world's largest money-making machine. The fund's success has implications for Norway's budget, with the government considering withdrawals to support the pension fund. Despite its ethical guidelines, the fund's investments span various sectors, including defense.
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