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Norway wealth fund hits 'milestone' $1 trillion value

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Norway wealth fund hits 'milestone' $1 trillion value
File photo: Olav Nesvold / NTB scanpix
17:31 CEST+02:00
Norway's sovereign wealth fund, the largest in the world, on Tuesday reached the value of $1 trillion dollars for the first time, the Norwegian central bank, which manages the fund, said.

This amount equals nearly $189,000 (157,000 euros) for each of the 5.3 million people living in Norway.

Established in the 1990s to manage the Norwegian state's oil revenues, the fund set the record thanks to the appreciation of the world's major currencies against the dollar and a good stock market health.

The fund mainly invests in stocks (accounting for 65.1 percent of the portfolio at the end of the second quarter), but also in bonds and real estate.

With stakes in nearly 9,000 companies, it owns 1.3 percent of the world's market capitalisation, and 2.3 percent in Europe.

"I don't think anyone expected the fund to ever reach 1 trillion dollars when the first transfer of oil revenue was made in May 1996," Yngve Slyngstad, Chief Executive Officer in Norges Bank Investment Management, said in a statement.

This jumbo piggy bank is intended to finance Norway's welfare state when the oil wells one day run dry.

The government, which pours all of its oil revenues into the fund, is allowed to draw only the equivalent of the expected financial returns, a ratio recently reduced from four percent to three percent.

"Reaching 1 trillion dollars is a milestone, and the growth in the fund's market value has been stunning," Slyngstad said.

Last year, for the first time, the government began withdrawing more from the fund than it put in, as oil revenues slumped due to the tumbling price of crude.

READ ALSO: Oil-rich Norway struggles to beat its 'petroholism'

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