OSLO, Jan 28 — Norway’s US$1.3 trillion (RM5.3 trillion) sovereign wealth fund, the world’s largest, earned a return on investment of 1.07 trillion Norwegian crowns in 2020, the second highest in its 25-year history, it said today.

"Despite the pandemic having put its mark on 2020, it has been yet another good year for the fund,” Central Bank Governor Oeystein Olsen said in a statement. The fund is managed by a unit of the central bank.

"However, the high return also reminds us that the market value of the fund might vary a lot going forward,” he said.

The return on investment was 10.9 per cent last year, 0.27 percentage points higher than the return on the fund’s benchmark index.

The fund’s results were boosted by US tech stocks, with Apple, Amazon, Microsoft and Tesla contributing the most to its absolute return, presentation material showed.

"Technology companies had the highest return in 2020, with a return of 41.9 per cent,” fund CEO Nicolai Tangen said in a statement.

"This is mainly due to the pandemic resulting in a massive increase in the demand for products for online working, education, trade and entertainment.”

On a country basis, the United States contributed the most, by far, to the fund’s return, with more than 500 billion crowns, followed by China with more than 100 billion crowns, presentation material showed.

Investments in Britain lost the fund 70 billion crowns.

Founded in 1996, the Norwegian fund holds stakes in around 9,200 companies globally, owning 1.5 per cent of all listed stocks. It also invests in bonds and unlisted real estate.

The fund holds the equivalent of US$240,000 for every Norwegian man, woman and child.

At the end of the year, 72.8 per cent of the fund’s investments were in stocks, 24.7 per cent in bonds and 2.5 per cent in unlisted real estate, it said. — Reuters