The fund returned 6.9 percent or 447 billion kroner (50 billion euros, $53 billion) last year, according to the central bank, which manages the fund.
As of the end of December, the total value of the fund stood at 7.51 trillion kroner.
The fund benefitted from a rally in world stock markets in the fourth quarter following the surprise election of Trump as US president, with investors hoping tax cuts and deregulation will spur corporate earnings.
The Bank of Norway's "board of directors is satisfied with the good performance last year and over time," governor Øystein Olsen told a press conference.
Set up in the 1990s, the public pension fund is intended to finance the future expenses of the welfare state by growing the country's oil wealth. It has more than doubled in size in the last five years, with 62.5 percent
of its portfolio invested in shares last year, 34.3 percent in bonds and 3.2 percent in real estate.
At the end of 2016, the fund had investments in nearly 9,000 companies. Last year, shares generated the biggest return of 8.7 percent. Bonds posted a return of 4.3 percent and real estate 0.8 percent.
Nevertheless, economists expect a slowdown in the fund's future financial performance, which is already suffering from a decline in public oil revenues due to falling prices.
For the first time, Norway drew out more from the fund than it paid into it.
While it had previously paid in an average of 171 billion kroner each year, the government made a net draw last year of 101 billion kroner. To prevent its savings from shrinking, Oslo has recently proposed to boost
investments in stocks -- more profitable but also riskier than bonds -- to 70 percent.
Whereas the government has been able to draw up to four percent from the fund each year to balance the budget, the current right-wing coalition this month suggested lowering that ceiling to three percent.
These proposals still need to be approved by parliament, where the government holds a minority.