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World’s biggest sovereign fund makes more money than ever

OSLO: Norway’s sovereign wealth fund, the world’s biggest, yielded returns of 1.02 trillion kroner (106 billion euros, $131 billion) in 2017, a record sum thanks to soaring global stocks, the Norwegian central bank said Tuesday.

At the end of last year, the fund was worth a whopping 8.488 billion kroner (almost 880 billion euros or $1.08 trillion).

Tasked with managing the country’s oil wealth and intended to finance Norway’s generous welfare state when its oil and gas wells runs dry, the fund posted a return of 13.7 percent in 2017, said the central bank, which manages the fund.

The strong performance was attributed primarily to stellar results in its share portfolio, whose value rose by 19.4 percent. Stocks account for 66.6 percent of the fund’s holdings.

Bonds and real estate, which account for 30.8 and 2.8 percent of the fund’s portfolio respectively, rose by 3.3 and 7.5 percent.

In absolute value, the 2017 returns were “clearly the best” in the history of the 22-year-old fund, its chief Yngve Slyngstad told reporters.

However, he warned, “it’s not realistic to expect such returns in the future,” reiterating that given the fund’s size “significant fluctuations” in its value could be expected.

The 2017 returns alone represent about a quarter of the fund’s cumulative earnings over 20 years of 4.15 billion kroner.

In percentages, it was the fund’s third-highest return, after 2009’s remarkable 25.6 percent in the aftermath of the global financial crisis, and the 16 percent posted in 2013.



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