Norway's Government Pension Fund, the world's largest sovereign wealth fund, said Friday it posted a return of 13.4 percent in 2012, its second best performance ever, as global equity markets rebounded.
Assets of the main investment vehicle for Norway's oil wealth were worth 3.8 trillion kroner (517 billion euros or $672 billion) at the end of last year, compared with 3.3 trillion at the end of 2011.
The Scandinavian country began pouring oil money into the fund in 1996.
"This is the second best performance in the history of the fund both in percent and in absolute value," said Yngve Slyngstad, head of the central bank unit that manages the fund, at a press conference.
But much of the rise could be attributed to financial markets rebounding from steep losses, and the stellar performance was unlikely to be repeated in coming years, he added.
Last year's increase came on the back of a rise in international stock markets, as equity holdings posted a return of 18.1 percent and had a 61.2 percent weighting in the portfolio.
Bond yields reached 6.7 percent while real estate investments brought 5.8 percent in the period. The two sectors represented 38.1 percent and 0.7 percent, respectively, of the portfolio.
Growth was also fuelled by the government's transfer of 276 billion kroner worth of oil and gas revenue into the fund in 2012.
A stronger currency knocked 220 billion kroner off the value of assets compared to the previous year, but will have no real impact on the country's wealth since the investments will remain outside Norway.
In 2012, the fund continued to diversify its holdings by focusing on emerging markets in the Americas and Asia.
European investments accounted for 46.8 percent of the portfolio, compared with 54 percent at the end of last year and a long-term target of 41 percent.
The value of the fund's assets grew by 3.3 percent in the fourth quarter.