OSLO (BLOOMBERG) - Norway's US$890 billion (S$1.19 trillion) sovereign wealth fund, the world's biggest, returned to gains in the second quarter even as it warned low interest rates will put pressure on returns ahead amid rising withdrawals from the government.

The Government Pension Fund Global gained 94 billion kroner (S$15.4 billion), or 1.3 per cent, after losing 0.6 per cent in the first quarter, the Oslo-based investor said on Wednesday. Its stock portfolio rose 0.7 per cent, its bond holdings gained 2.5 per cent and the real estate investments lost 1.4 per cent.

The fund's fixed-income investments delivered "gains due to falling interest rates," Deputy Chief Executive Officer Trond Grande said in a statement. "In the long term, however, lower interest rates have negative implications for future returns on the fixed-income portfolio."

The fund, which largely follows global indexes, has been whipsawed over the past year by market turmoil stirred up by concerns over growth in China, a rout in commodities and most recently, the UK vote to leave the European Union. The Norwegian government is at the same time making its first ever withdrawals to cover budget holes caused by the plunge in crude prices over the past two years.

Government withdrawals from the fund totaled 24 billion kroner in the second quarter, up from 21 billion kroner in the first quarter.

The fund, which received its first capital transfer in 1996 and gets investment guidelines from the government, held 59.6 per cent in stocks, 37.4 per cent in bonds and 3.1 per cent in real estate at the end of the quarter. It's mandated to hold 60 per cent, 35 per cent and 5 per cent in those asset classes, respectively.

The return in the quarter trailed the benchmark set by the Finance Ministry by 0.1 percentage point.

The fund's biggest stock investments were Nestle, Royal Dutch Shell and Apple. Its biggest bond investment were US, Japan and Germany.