Tech stocks helped drive a record $213 billion gain at the world's biggest sovereign wealth fund in 2023

• The world's largest sovereign fund reported a record-high profit of $213 billion in 2023.
• Returns on equity investments hit 21.3%, boosted by tech shares, the fund's CEO said.
• Tech dominance is in focus this week, as Microsoft, Alphabet, Apple, and Amazon report earnings.

The rally in tech shares that powered the stock market in 2023 helped drive record gains for the world's biggest sovereign wealth fund last year.

Norges Bank Investment Management on Tuesday announced a record-breaking profit of 2.22 trillion kroner ($213 billion) in 2023,

"Despite high inflation and geopolitical turmoil, the equity market in 2023 was very strong, compared to a weak year in 2022," CEO Nicolai Tangen of Norges Bank Investment Management said in a note, adding that "Technology stocks in particular performed very well."

Most of the fund's portfolio categories performed in line with markets, with returns on stock investments achieving the highest growth at 21.3%, followed by fixed income at 6.1%, and unlisted renewable energy infrastructure at 3.7%. However, returns on real estate investments saw a loss of 12.4%.

Norges is the world's largest sovereign wealth fund, with over $1.5 trillion under management. It was established in the 1990s to invest the extra revenues of the country's oil and gas sector, and at the end of 2023 its portfolio encompassed investments in over 70 countries and in more than 8,000 companies.

Tech stocks have been front and center for investors for the last year, driving the stunning 25% gain in the S&P 500 in 2023. There's growing concern that the gains won't last, however, and that the group of Magnificent Seven stocks that drove the greatest returns in the benchmark index last year are set to underperform in 2024 amid lofty valuations and slower earnings growth.

This week will give investors a taste of what to expect from mega-cap tech this year, as Microsoft, Apple, Alphabet, Amazon, and Meta Platforms are all scheduled to report results for the fourth quarter.