The Norwegian paradox: Turning one's back on the Israeli market while enjoying its rally
The Norwegian sovereign wealth fund has cut the number of Israeli companies in its portfolio by more than half due to ethical considerations under heavy political pressure. Its semi-annual report reveals that the value of its assets in Israel has actually increased, driven by the significant rally in the local market over the past two years.
Last year, the Norwegian sovereign wealth fund removed dozens of Israeli companies from its portfolio, citing ethical grounds related to the occupation of territories, the war in the Gaza Strip, and suspicions of "involvement in war crimes." The decision followed heavy public and political pressure on the fund, which manages approximately $2.3 trillion in global investments. Since then, the fund has suspended the activities of its ethics committee due to fears of an American backlash and concerns regarding the legal necessity of divesting from technology giants due to their ties with Israel.
Now, the semi-annual report published today, covering the first half of 2026, shows that although the number of Israeli companies has dropped sharply, the value of its investments in the Israeli market has risen. As of December 31, 2024, the Norwegian fund held shares in 65 Israeli companies, with a total investment value of 22.2 billion Norwegian kroner ($1.95 billion). As of June 30, 2026, according to the report published today (Wednesday), it holds shares in only 29 Israeli companies, yet the total investment value has reached 23.9 billion Norwegian kroner ($2.4 billion).
Israeli companies removed from the fund's investment portfolio
This indicates that the investments liquidated for ethical and international law reasons were minor compared to the fund's large holdings in companies such as Teva, ICL, Tower, Nova, and others. Furthermore, the Israeli stock exchange recorded superior performance compared to other markets over the past year, which increased the value of the Norwegian holdings.
Among the companies removed from the portfolio during the year are almost all major banks (except for Discount Bank) due to "providing financial services to settlements and in East Jerusalem," the company "Bet Shemesh Engines," which is involved in the maintenance of fighter jet engines, and infrastructure companies like Bezeq. Previously, the company Delek was also removed from the investment portfolio.
The semi-annual report data shows that the fund recorded a return of 9.4%, which, according to its managers, stems mainly from sharp rises in Asian markets. The fund revealed that it holds 0.05% of the shares of SpaceX, which recently went public, about 1.3% of Nvidia shares, and 1.2% of Apple shares. The fund invests in stocks and bonds of approximately 7,000 companies worldwide, effectively holding 1.5% of all publicly traded shares globally.
"The results stem from good returns in the stock market, especially from Asian technology stocks," said the fund's CEO, Nicolai Tangen, in a press release published alongside the semi-annual report.
