OSLO: Norway’s $1.6 trillion sovereign wealth fund, the world’s largest, reported on Tuesday a record profit of 2.22 trillion crowns ($213 billion) in 2023, driven by strong returns on its investments in technology stocks.

The results compared with a record loss in 2022 of 1.64 trillion crowns, when tech stocks fell.

“2023 ended a lot better than expected,” NBIM CEO Nicolai Tangen told a press conference.

Tech stocks contributed half of the fund’s return, driven by a business breakthrough for artificial intelligence, an improvement in the general economic outlook and expectations for lower interest rates, the fund said.

The fund’s most valuable company stakes were in Microsoft , Apple and Nvidia. The most valuable non-tech stock was pharmaceutical company Novo Nordisk , in eighth place.

The fund’s return on investment in 2023 stood at 16.1% for the year, 0.18 percentage point lower than the return on its benchmark index.

Earlier this month, Tangen warned that inflation would remain persistent worldwide and would come down “more slowly than I think is generally expected”.

On Tuesday, he told Reuters the disruption to global trade due to the tensions in the Red Sea would have some effect on inflation but that he expected it would be “relatively limited”.

More widely, the risk of the war in Gaza expanding into a regional conflict was “one of many risks that we are looking at”, he said in an interview after the results presentation.

“The effect of a wider war would be mainly impacting through higher energy prices,” he said.

Separately, the fund’s deputy CEO said on Tuesday the crisis at Chinese property giant China Evergrande Group had long been expected. The fund itself had divested from China Evergrande as far back as 2021, fund data showed.