Norway sovereign wealth fund grows in first quarter

Norway's Government Pension Fund, the world's largest sovereign wealth fund, grew in the first quarter on rising stock markets, especially in the United States and Japan, the central bank that manages it said Friday.

The fund, which contains most state revenues from the country's massive oil and gas sector, invests abroad in equities, bonds and, to a lesser degree, real estate.

It registered a return of 5.4 percent in the January to March period, or the equivalent of 219 billion kroner (28.7 billion euros, $37.3 billion).

Its total value was 4.18 trillion kroner (548.1 billion euros, $713.2 billion), up from 3.81 billion three months earlier, thanks to returns on its investments, positive currency effects and new oil revenue deposits.

The fund was created in the early 1990s to help finance the generous welfare state system once the wells run dry.

"The favourable performance reflects the strong push in equity markets, particularly in January and February. Among the major stock markets, the US and Japanese markets made the largest contribution," the head of the fund, Yngve Slyngstad, said in a statement.

The fund registered a return of 8.3 percent on its share portfolio, which accounted for 62.4 percent of investments, while its bond portfolio, which accounted for 36.7 percent, registered a more modest return of 1.1 percent.

Strict ethical regulations bar it from investing in "particularly inhumane" weapons makers, the tobacco industry and companies that are found guilty of violating human rights, causing serious environmental damage, or corruption.

According to Norwegian daily Aftenposten, the ethics committee that provides advice for the fund's management, is currently looking into its investments in Equatorial Guinea.

Despite large oil revenues that give the country a per capita gross domestic product (GDP) higher than Portugal, 77 percent of the population lives in extreme poverty, the paper said.

Holdings in oil groups such as US giant ExxonMobil -- which is very active in the African country and in which the fund held more than 16 billion kroner at the end of 2012 -- could be at stake.

Slyngstad said the fund would in the future play a more active role on the boards of companies in which it invested, notably participating in the election of board members.

According to the specialised SWF Institute, the Norwegian sovereign wealth fund is the world's largest, ahead of that of Abu Dhabi.