Market situation

The broad stock market, measured by MSCI World, rose 18.7 percent in USD in 2024. A strong US dollar and a weakened krone contributed to a return of 33.6 percent in Norwegian kroner. The Norwegian krone also weakened by 4.7 percent against the Euro. As in 2023, artificial intelligence, inflation, interest rates, and economic developments in China were key themes that influenced the year’s developments in financial markets. The American technology giants continued to dominate market developments. The so-called Magnificent 7, which by the end of the year constituted nearly 24 percent of the world index, accounted for almost half of the world index’s 18.7 percent return. In 2024, Nvidia had the highest return among the large companies, with a return of 171 percent. 

In the bond market, there were relatively large fluctuations throughout the year. After a significant fall in long-term interest rates and expectations that the interest rate peak was reached by the end of 2023, the year started with an increase before rates fell back during the spring and into the summer. However, strong macroeconomic key figures in the US and an increased likelihood of Trump winning the presidential election contributed to rising US interest rates from September until the election. Afterwards, they continued to rise throughout the year. Ten-year US government bonds ended the year at 4.6 percent, an increase of 0.7 percentage points from the start of the year. Both the US and European central banks cut rates by a total of one percentage point in 2024. 

The USA was clearly the best region again in 2024, with an increase of 25 percent for the S&P 500. For growth stocks in the Russell 1000 Growth, the return was 33 percent. The IT index rose 32.8 percent. The strong performance of Alphabet and Meta contributed to an even stronger rise in communication services. The Oslo Stock Exchange ended the year with an increase of 9.4 percent in Norwegian kroner, somewhat above MSCI Europe, which rose 8.6 percent measured in Euro. 

The broad Asian stock market, measured by MSCI AC Asia Ex. Japan, ended the year up 12 percent in USD. The Chinese stock market rose sharply in September after Chinese authorities announced the first of a series of measures to stimulate the economy, which is characterised by falling property prices, flat price growth, and weak consumption. After the sharp rise, the Chinese market fell back but ended the year up 19.4 percent. The Indian market rose 11.2 percent in 2024, while South Korea (Kospi) fell 21 percent. 

Activity and results

The business area’s return for 2024 was 6.5 percent measured in USD. Exchange rate developments contributed to a return of 19.1 percent in Norwegian kroner. 

The business area manages the two mandates Global Equity and Global Fund Opportunities. The purpose of the Global Equity mandate is to make investments in attractive markets through equity funds that complement Ferd’s direct investments. The mandate consists of four themes: The Green Shift (27 percent of capital), US Centric (26 percent), Asia (25 percent), and Technology (22 percent). 

The return on the Global Equity mandate ended at 6.1 percent in USD. In 2024, there were also significant return differences between the themes. The technology theme again had the highest return, with an increase of 24.6 percent in USD. A third of the capital in the theme is invested outside the IT sector itself. In total, the theme’s investments within and outside the IT index had the same return. The theme’s investments in Asia and its underweight to Nvidia were notable contributors to the theme’s return ending behind the return of the IT index. 

US Centric returned 11.3 percent in USD. The theme’s investments in American growth companies had a good year. Growth companies in IT and communication services stood out positively. The theme’s investments in more mature, globally leading companies lagged behind in the concentrated market rise. 

The Asia theme rose 3.7 percent in USD in 2024 and had a weak year compared to the broad market. The theme’s underweight to the Taiwanese semiconductor producer TSMC, which rose 72 percent in 2024, contributed negatively. At the same time, the return on investments in China, India, and small and medium-sized companies was weaker than the index. 

The green shift had a very weak year with a decline of 8.8 percent in USD. Investments in the energy transition had the weakest development. The value chain for renewable energy and renewable power generation are both interest rate-sensitive segments, and rising long-term interest rates therefore had a negative impact. Due to Trump’s clearly negative attitudes towards parts of the energy transition, several stocks in the theme also fell sharply after he was elected president. On the positive side, 2024 was a strong year for investments in infrastructure, with an increase of over 34 percent. Companies in this segment have benefited from artificial intelligence and the associated expansion of data centers. Parts of the investments in energy efficiency also experienced similar tailwinds. 

Global Fund Opportunities consists of fund investments that offer attractive absolute returns and have lower correlation with the stock markets than ordinary equity funds. The mandate’s return ended at 7.1 percent in USD. The liquid investments returned 18.7 percent in USD with good contributions from all three funds. The illiquid investments fell 3 percent in USD in 2024, dragged down by the European and Asian investments. 

Allocations

Total net cash flow for the year was minus NOK 466 million, of which NOK 256 million was allocated out of the Global Equity in January.  

The remaining cash flow of minus NOK 211 million came from the Global Fund Opportunities mandate, where the two liquid funds paid out part of last year’s return to all investors. This amounted to NOK 127 million. The illiquid funds paid out a net of NOK 38 million for the year.  

At the end of 2024, assets under management were NOK 8.4 billion, split among 15 different managers. Of this, Global Equity accounted for NOK 4.7 billion and Global Fund Opportunities for NOK 3.7 billion.