UPDATE 3-Norway wealth fund earned $111 bln in H1 but warns of inflation risk | Reuters

UPDATE 3-Norway wealth fund earned $111 bln in H1 but warns of inflation risk | Reuters

Norway’s $1.4 trillion sovereign wealth fund, the world’s largest, posted a 9.4% return on investment for the first half of the year on Wednesday but warned that signs of inflation seen worldwide could lead to unprecedented losses.

The fund’s handsome return was driven by a sharp rise in global equities, particularly energy, finance and tech stocks, earning it 990 billion crowns ($111 billion) in the January-June period.

That was 0.28 percentage point higher than the fund’s benchmark index - and equivalent to a little over $20,000 for every Norwegian man, woman and child.

But the fund, which holds stakes in over 9,100 companies worldwide, is concerned that signs of inflation observed in things such as wages, freight rates or raw materials, will lead to much higher interest rates worldwide.