Norway's $2 trillion sovereign wealth fund just delivered its strongest quarterly performance this year, posting a 5.8% return in Q3 powered by AI-fueled tech gains. The world's largest fund of its kind added $102.6 billion in value during the three-month period, with equity investments surging 7.7% as markets bet big on artificial intelligence's commercial potential.
The numbers tell the story of a fund riding the AI wave to massive gains. Norway's Government Pension Fund Global, managed by Norges Bank Investment Management (NBIM), saw its value climb to 20.4 trillion Norwegian kroner ($2 trillion) by September's end - an increase of 854 billion kroner in just three months. That translates to roughly $102.6 billion in profits, or about $19,000 for every Norwegian citizen. The fund's equity investments delivered the heavy lifting, posting 7.7% returns while fixed income managed just 1.4%. Real estate added 1.1% and renewable energy infrastructure contributed 0.3%. It's a performance split that reflects where the real action is happening in today's markets - and it's all about artificial intelligence. Trond Grande, NBIM's deputy CEO, told CNBC that AI optimism among tech companies was a key driver, particularly in Asia-Pacific markets where corporate governance improvements in Japan and South Korea added fuel to the rally. The fund's massive exposure to US tech giants puts it squarely in AI's path. With nearly 40% of its equity investments in American stocks, NBIM holds significant stakes in Meta, Alphabet, Amazon, Nvidia, and Microsoft - essentially every company driving the AI revolution. But Grande pushed back against bubble talk when pressed by CNBC's Julianna Tatelbaum. 'I wouldn't use that word,' he said. 'We see elevated pricing, but we also see strong earnings. There's obviously a lot to say for this technology. However, the jury is still out on exactly who is going to monetize this new technology in the best way.' That measured optimism reflects the fund's long-term mandate. Born from Norway's oil wealth in the 1990s, the fund was designed to invest excess petroleum revenues for future generations. Today it holds stakes in nearly 9,000 companies across 70 countries - a diversification strategy that's paying dividends as the global economy transitions toward AI-powered growth. The Q3 gains came despite market volatility that saw major US indexes swing between selloffs and record highs as investors grappled with trade tensions and economic uncertainty. Tech megacaps have experienced even sharper swings since the reporting period ended, with growing concerns about in equity markets. Yet the fund's broad diversification helped smooth those bumps. Basic materials, financials, and telecommunications sectors all contributed to the quarterly performance, Grande noted. The geographic spread also helped, with Asia-Pacific markets providing particular strength. The fund's allocation tells the story of where it sees opportunity: 71.2% in equities, 26.6% in fixed income, 1.8% in real estate, and 0.4% in renewable energy infrastructure. Capital inflows reached 81 billion kroner after management costs during the period. Currency movements added another layer of complexity. The Norwegian krone appreciated 0.7% against the dollar during Q3 and has gained 12% versus the greenback for the full year - a factor that can significantly impact returns for a fund of this scale. Not everything was smooth sailing for NBIM during the quarter. The fund drew criticism from the Trump administration over its decision to restrict investments in Israeli companies, including divesting its stake in amid concerns about ties to the Gaza conflict. The called the move 'very troubling.'
