How sparsely populated Norway amassed $1.8 trillion
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Launched in the early 1990s to invest mostly in bonds, the fund has grown to become the largest of its kind by acquiring small equity stakes in thousands of companies across the world.
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July 30, 2025
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Economy·norwayHow sparsely populated Norway amassed $1.8 trillionBy Heidi Taksdal SkjesethBy BloombergBy Heidi Taksdal SkjesethBy Bloomberg With $1.8 trillion of assets, the fund now generates far more income for the Nordic country’s 5.6 million population than oil and gas duction. joe daniel price via GettyOf all the world’s sovereign wealth funds, Norway’s is one of the most unusual
These giant, state-linked investment vehicles tend to pick and choose what assets they hold to manage risk, maximize returns and further national strategic interests
Not so with Norges Bank Investment Management, which largely tracks global indexes in order to generate an income from the country’s oil and gas revenues
Launched in the early 1990s to invest mostly in bonds, the fund has grown to become the largest of its kind by acquiring small equity stakes in thousands of companies across the world
With $1.8 trillion of assets, the fund now generates far more income for the Nordic country’s 5.6 million population than oil and gas duction
There are growing concerns that the economy has become so dependent on the income from the fund that domestic industries are becoming less innovative and dynamic as a result
There’s also been criticism of the fund’s passive apach to the nation’s wealth, which leaves it with few tools to adapt to the ebb and flow of global capital
This was underscored in April when it reported its biggest loss in six quarters amid the market turmoil unleashed by US President Donald Trump’s threatened trade tariffs
What’s special Norway’s sovereign wealth fund? The fund stands apart from many of its peers due to its strict investment rules
Firstly, it must always invest outside Norway — a rule designed to avert the risk of “Dutch disease,” where resource wealth can end up destabilizing the domestic economy by inflating the local currency and making it harder for other national industries to compete
Whereas wealth funds in many other nations act partly to stimulate domestic industries or invest strategically to enhance a country’s soft power abroad, NBIM has limited scope for active
The equity portion of the fund, which makes up 70% of the total, holds stakes in the 8,700 listed companies in 44 countries that comprise the FTSE Global All Cap index
As a result, it now owns 1.5% of listed stocks worldwide
The fixed-income portion of the fund tracks Bloomberg Barclays indexes, with 70% allocated to government bonds and 30% to corporate securities
Other wealth funds are freer to adjust their priorities and how they achieve them
The Abu Dhabi Investment Authority is increasingly focused on private equity and data-driven , while Mubadala Investment Co. plays a central role in diversifying the emirate’s economy through stakes in health care and finance
Saudi Arabia’s Public Investment Fund is leading the kingdom’s Vision 2030 transformation plan, with major bets on mining, gaming and nology
Singapore’s GIC Pte is ramping up its US exposure and taking on more risk in private
What are the origins of Norway’s wealth fund? Norway discovered significant oil and gas reserves in the North Sea in 1969, and today is western Europe’s largest ducer of the fossil fuels
Anxious to avoid the instability, corruption and weak economic growth experienced in other resource-rich economies, the government imposed heavy taxes on the energy sector and placed strong regulatory controls on the industry
In 1990, after years of political debate, Norway’s parliament created the Petroleum Fund to ensure that oil revenues would benefit current and future generations
The first capital transfer to the fund was made in 1996
As it spread its investments across the world, it shifted gradually to explicitly supporting the national pension system, and was renamed the Government Pension Fund Global in 2006
The fund is managed by NBIM, the asset management arm of Norway’s central bank
How did Norway’s wealth fund get so big? Early on, the fund was padded out with cash from oil taxes, licensing fees and fits from the state energy company
Initially limited to in bonds, its mandate expanded over time
Today, it’s the world’s biggest single owner of listed s
The government can’t just grab what it wants from the fund
No more than 3% of its value can be diverted annually to the national budget, a rule int to preserve the wealth for future generations
The rest is kept for new investments
When comparing its investment returns with those of other sovereign wealth funds, the Norwegian fund achieved a relatively average performance over the five years to 2023, returning 7.45%, according to re consultancy Global SWF
That’s less than Abu Dhabi fund Mubadala, at 10.1%, and China Investment Corporation, with 8.6%, but higher than the 4.5% return for Singapore’s Temasek and 5.2% for the Korean Investment Corporation
How has the Norwegian fund’s mandate evolved? The fund has increased its investments in equities over time and added real estate and renewable energy infrastructure
It has also emphasized sustainability and responsible , with a growing focus on environmental, social and governance factors — an apach that’s not changed in response to the US Trump administration’s backlash against “woke capitalism.” What are the Norwegian fund’s ethical principles? Since 2004, the fund has operated under ethical guidelines set by the finance ministry and apved by parliament
An independent Ethics Council oversees the guidelines, which hibit investments in companies involved in “gross corruption” or serious violations of human and labor rights, or that contribute to severe environmental damage
They also exclude companies that duce certain weapons, such as nu arms and cluster bombs
Some 67 companies had been dropped from the fund by the end of 2024 due to their conduct
These included Indian firm Adani Ports, for its with the armed forces of Myanmar, and the communications company Bezeq, for its activities in Israeli settlements in the West Bank, which are illegal under international law
A further 104 companies have been removed from the fund because of what they sell: The fund’s guidelines hibit investments in the cannabis industry, tobacco and coal
It also avoids companies that are responsible for “unacceptable greenhouse gas emissions” — even though the fund itself is infused with income from the sale of fossil fuels
Will the Norwegian wealth fund change its mandate? NBIM reported a 0.6% loss on its investments — equivalent to $40 billion — in the first three months of 2025
The market downturn has deepened since then in response to President Trump’s sweeping US tariffs, sparking a debate in Norway over how to tect the fund from a more unpredictable economic climate. 40% of the fund’s equity holdings are in the US, and some Norwegian politicians say it should shift more investments to Europe so it’s less exposed to volatile US
US bonds made up 9% of the fund’s holdings at the end of 2024
Norway’s finance minister, former NATO Secretary General Jens Stoltenberg, has said the fund remains committed to its long-term strategy while “continuing to assess risk management options.” Norway’s conservative opposition has posed revising the fund’s guidelines to allow it to buy s in companies that make nu weapons
The current restriction precludes the fund from in much of the European arms industry, which is in line for a fit windfall as governments embark on the biggest rearmament since the Cold War in response to Russia’s war in Ukraine
Norway currently supplies 30% of Europe’s gas, and some politicians have called for more cash transfers from the fund to support the government in Kyiv, arguing that Norway’s oil and gas industry has made massive fits from the European energy crisis that ed Russia’s 2022 invasion of Ukraine
The fund’s leadership has argued repeatedly for adding private equity to its investments, a call that the finance ministry has rejected, wary of the sector’s high fees and relative lack of transparency
What does Norway do with the wealth fund’s available fits? Some of them go to support Norway’s extensive welfare system, which vides free education and health care, subsidized child care and generous sick leave
Norway ranks third on the UN’s global Human Development Index, after Iceland and Switzerland
In 2024, transfers from the fund accounted for roughly 20–25% of the national budget
The government has posed to transfer 50 billion kroner ($4.85 billion) from the fund to support the government of Ukraine
What’s the fund’s impact on Norway and the world? The fund has been a financial buffer that enabled the country to weather fluctuations in oil prices and the economy and maintain the country’s fiscal stability
The fund has furthered Norway’s soft power by moting sustainable practices worldwide
In June 2024, its managers voted against Tesla Inc
Chief Executive Officer Elon Musk’s record high compensation package of $56 billion that’s since risen in value and has been contested in court
The fund issues its voting intentions five days before the annual meetings of the companies it invests in, and opposed board recommendations in 5% of holder votes in 2024
Yet there’s a debate how reliant Norway has become on the money generated by the fund
Critics say it’s making the country’s political leaders complacent and its population less ductive
They point to data showing national ductivity has worsened relative to other wealthy nations in the past two decades
The government is spending growing sums to subsidize sick leave for workers, and student test stores have been on a downward trend.
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