Norway's wealth fund rises in Q2, reiterates returns will drop

[OSLO] Norway's sovereign wealth fund, the world's largest, reported returns of 2.6 per cent in the second quarter, beating its benchmark by 0.3 percentage points as equity markets surged, it said on Tuesday.

"The stock markets have performed particularly well so far this year," the fund's deputy chief executive Trond Grande said in a statement.

While the fund's return in the first half of 2017 amounted to a record 6.5 per cent, this was unlikely to be repeated in the future, he cautioned.

The fund invests the revenues of Norway's oil and gas production for future generations. It is now so large it amounts to two-and-half-times the size of the Norwegian economy.

The fund has for some time said its returns are likely to ease as ultra-low interest rates drag down performance.

The government withdrew 16 billion crowns (S$2.75 billion) during the second quarter to pay for public expenses. By comparison, it had taken out 23 billion crowns in the first quarter.

REUTERS