OSLO (Reuters) - The pandemic is becoming less dominant in the markets and other risks, such as inflation and a stock market correction, are rising, as vaccines fuel optimism and recovery, a top official at Norway’s $1.3 trillion wealth fund said on Wednesday. On the basis of strong stock markets, driven by the finance and energy sectors, the world’s largest wealth fund on Wednesday reported earnings of $46 billion between January and March, a 4.0% return on investment that beat its own benchmark index. “I would still put it (the pandemic) as one of the top three risks, absolutely, at this stage. We are seeing a slightly more balanced risk picture because there is more optimism now for growth and inflation,” deputy CEO Trond Grande told Reuters after the first-quarter results. For a graphic on Market value of Norway’s wealth fund: While stocks earned a return of 6.6% for the fund, the fixed income portfolio had a rare loss of 3.2%, as interest rates rose substantially after a prolonged slide. “What you are seeing are some signs of some build-up of some inflation here and there, at least on the materials and raw materials side,” he said. “If that translates into inflation more broadly, I think you could see interest rates rising further,” he said adding that he had been a “little surprised” by the strength of the equity markets over the past year. “There will be at some point a correction. We just need to be prepared for it,” he said, declining to say when he expected it. The fund invests the Norwegian state’s revenues from oil and gas production into 9,100 companies worldwide, owning 1.4% of all listed shares globally. It also invests in bonds, property and, since this month, it has invested in green infrastructure. Its investment comprises 73.1% in equities, 2.5% in unlisted real estate and 24.5% in fixed income.