The gains of almost 1.6 trillion Norwegian kroner ($177 billion, 158 billion euros) represented a return of 14.5 percent. The fund — which the country funnels its oil revenues into — ended the year with a colossal total value of 12.3 trillion kroner.
Central Bank Governor Oystein Olsen described it as “a quite rewarding year”.
This is the fourth best annual percentage return in the history of the fund, which was set up in the 1990s, and the second best in absolute terms.
But the central Norges Bank, which manages the fund, cautioned that such results could not be expected in the future.
“We have to be prepared for downturns,” said Trond Grande, deputy chief executive for Norges Bank investment management.
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Stocks, which accounted for 72 percent of the total portfolio at the end of December, gained 20.8 percent, driven in particular by the US and the energy, finance and technology sectors.
Microsoft, Alphabet (Google’s parent company) and Apple were the top three companies contributing to the fund, with gains of 78 billion, 64 billion and 61 billion kroner respectively in 2021. The fund has stakes in more than 9,000 companies.
Stock markets have fallen sharply since the beginning of the year in the face of inflationary pressures and the prospect of rising interest rates, coupled with uncertainty tied to the standoff between NATO and Russia over Ukraine.
The fund’s bond investments, which account for 25.4 percent of assets, suffered a negative return of 1.9 percent as interest rates remained low in 2021. Real estate investments, accounting for 2.5 percent of the portfolio, gained 13.6 percent, while unlisted renewable energy projects, the fourth asset class although only marginal, posted a return of 4.2 percent.