Norway’s US$1.6 trillion  sovereign wealth fund underperformed its benchmark in the first quarter, with returns coming up short for a second consecutive report.

Norges Bank Investment Management (NBIM), which manages Norway’s fossil wealth, returned 6.3%, or US$110 billion, it said in a statement on Thursday. That’s down from a 7.9% return in the final quarter of last year.

The fund, largely an index tracker, gained 9.1% on stocks and lost 0.4% on its fixed-income investments. It missed the benchmark by 0.1 percentage point in the quarter, driven by “weak results” from real estate.

“Our equity investments had a very strong return in the first quarter, particularly driven by the tech sector,” Trond Grande, the deputy chief executive officer, said in the statement.

Global stock markets climbed in the first three months of the year across industries, with the exception of real estate, but persistent price pressures have weighed on markets in recent weeks. NBIM chief executive officer Nicolai Tangen told Bloomberg last week that inflationary factors ranging from rising commodity costs to wage increases will continue to dog global economies.

NBIM invests according to a strict mandate from the Finance Ministry, measuring itself against a benchmark index based on the FTSE Global All Cap Index for equities and Bloomberg Barclays indices for fixed income.

The fund lost 0.5% on its unlisted real estate holdings and 11.4% on unlisted renewable-energy infrastructure.

The government deposited 96 billion kroner (US$8.7 billion) into the fund during the quarter. 

  - Bloomberg