Mubasher: Managers of the world's largest sovereign wealth fund have expressed worries over global trade wars and mounting tensions, noting that these elements could negatively impact the fund's value and investments.

On Tuesday, the fund, known as the Government Pension Fund Global, announced achieving a 1.8% return, representing NOK 167 billion ($19.8 billion) in the second quarter of 2018. In Q1-18, the fund had suffered a loss of NOK 171 billion ($20.49 billion) and had cited a turbulent stock market.

"It's fair to say that increased trade barriers or even trade wars will not be beneficial for the fund as a long term global investor," deputy chief of Norges Bank Investment Management (NBIM) Trond Grande said.

In the three-month period ended 30 June, the total value of the Norwegian Government Pension Fund Global jumped to NOK 8.337 trillion (roughly $991 billion).

However, NBIM, the asset management unit of the Norwegian central bank (Norges Bank), which runs the fund, stated that ongoing geopolitical tensions and talks of trade wars presented a risk to the sovereign wealth fund, which has investments in 72 countries and around 9,000 companies across the world.

The possible trade war between the US and China with each threatening to impose multi-billion-dollar tariffs on the other added to the US-Turkey spat which prompted a sharp slide in the Turkish lira by as much as 40% against the US dollar have alarmed the Norwegian fund. It said that its assets in Turkey were now lower than the NOK 23 billion ($2.76 billion) it had there earlier in 2018.

Norway's sovereign wealth fund attributed its Q2-18 growth to its portfolio in stocks, which account for 66.8% of its overall investments, and which grew 2.7% between April and June.

The fund's property holdings, representing 2.6% of its investments, increased 1.9% in Q2-18, while its bond holdings, representing 30.6%, remained unchanged during the period.

"We've seen the market rise for a long time, that there are different political and geopolitical events in the world that can affect the market, and we have to be prepared for the fact that (the value of) the fund can go down a lot," Grande stated.