Q2 2024 was good for the oil fund. Steering towards a strong plus

The oil fund’s return is falling. But US tech giant Nvidia is working to slow the decline.

Global stock markets were friendly to the oil fund in the second quarter as well, according to Aftenposten estimates.

As usual, the United States is leading the way.

Aftenposten estimates that the fund's returns were in the range of 2-2.5 percent, measured in foreign exchange (currency) terms.

About 70 percent of the fund's money is invested in the stock market. Most of the rest is in interest-bearing marketable securities (bonds).

The fund will present its second quarter results at Arendal Week on August 14.

“OK”

in Annual reports The box shows stock indices. Standard & Poor's 500 For the United States, MSCI Asia Pacific For Asia and europe stox 600 For Europe. These developments are reflected in the stock markets in all three regions.

Measured against the three stock indices, including dividends paid, the second-quarter return was as follows:

• USA: 4.3 percent
• Asia: 2.6 percent
• Europe: 1.6 percent

In the United States and Asia, the return is measured in dollars, while in Europe it is measured in euros.

– Earnings expectations are maintained. This indicates that companies are performing well in all three regions, says Nordea's investment manager Robert Ness.

Nearly zero on interest bearing securities

About 30 percent of the oil fund’s money is invested in bonds. Current yield payments and changes in fixed-income securities prices suggest the oil fund’s return on them was close to zero in the second quarter.

Taking into account the fund's distribution of shares in the USA, Asia and Europe and the distribution of stocks and fixed income securities, the return of the entire fund can be estimated at 2 – 2.5 percent per quarter.

This is the estimated return of the fund in foreign currency. This is what matters to Norway. The oil fund is obtained through the export of oil and gas in exchange for payment in foreign money. Foreign money can only be used to finance imports.

South and North America, as well as Europe, represent about 80 percent of the fund's total investments.

Much higher than expected

The estimated return in the second quarter fell sharply from the very strong return. 6.3 percent In the first quarter.

However, the second-quarter estimate is well above the long-term expected return of 5 percent per year. This corresponds to about 1.2 percent in this quarter. The estimated second-quarter result is well above this. The fund is ahead of schedule.

After deducting price inflation, the expected real return over the long term is 3 percent, which is the basis for what is called verb base To use oil money.

The fund is therefore expected to return between 8.5 and 9 percent in the first half of the year.

Expressed in kroner, the Oljefondet remained almost unchanged throughout the second quarter. This ensured a stronger exchange rate for the kroner against major world currencies. This meant that investments in foreign funds were converted into fewer Norwegian kroner.

Nvidia pulls up

Artificial intelligence speculation is driving U.S. stocks higher. Nvidia is one of the world’s most valuable companies and designs advanced computer chips used in artificial intelligence.

The share rose a whopping 37 percent in the second quarter.

– This alone secured a 1.5 percent increase in the broad S&P 500 index. Nvidia thus explains much of the difference between the US and European stock markets this quarter, says Næss at Nordea.

The French stock market stands out as particularly bad.

– It fell by 6.6 percent during the quarter, with almost all of the decline occurring in June. One important reason, says Nice, is the uncertainty created by President Macron’s decision on new elections.