BBDO Banco Bradesco SA

By Dominic Chopping

Norway's sovereign wealth fund, the world's largest, made a positive return of 1.8% on its investments in the second quarter of 2018 as higher global stock markets boosted its equity investments, it said Tuesday.

By overall sector, oil and gas companies were the strongest performers in the second quarter, thanks to higher oil prices in the wake of brisk demand and OPEC quota discipline.

Norges Bank Investment Management, the arm of the central bank that manages the so-called oil fund, said the annual return equated to 167 billion Norwegian kroner ($19.7 billion).

"North American and European stocks had a positive development in the quarter despite the prospect of increased trade barriers," said Norges Bank Investment Management Deputy Chief Executive Trond Grande.

However, the prospect of increased trade barriers and a weaker growth outlook in Europe, China and emerging markets as well as political uncertainty in Italy all limited stock market gains, it added.

The fund held 66.8% in equities, 30.6% in fixed-income assets and 2.6% in real estate at the end of the quarter.

The total value of the fund at June 30 was NOK8.337 trillion, and it noted that the depreciation of the krone against the U.S. dollar during the quarter increased the fund's value by NOK47 billion.

In individual stocks, NBIM said Amazon.com Inc. (AMZN) made the biggest positive contribution to the fund's return in the quarter, followed by Apple Inc. (AAPL) and Royal Dutch Shell PLC (RDSA).

Banco Santander SA (SAN), Taiwan Semiconductor Manufacturing Co. (TSM) and Banco Bradesco SA (BBD) made the biggest negative contributions, it said.

Equity investments returned 2.7% in the quarter, while unlisted real-estate investments returned 1.9% and fixed-income investments 0.0%, NBIM said.

The fund transferred NOK2 billion to the government in the quarter, but Mr. Grande said: "In June, the fund had its first inflow since 2015. For the quarter as a whole we still had outflow."

The oil fund was set up in the 1990s to convert Norway's vast oil wealth to global financial assets, partly to shield the country's budget from oil-price fluctuations.

Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics

(END) Dow Jones Newswires

August 21, 2018 04:48 ET (08:48 GMT)

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