Norway’s sovereign wealth fund lost $174 billion in six months

Among the reasons were rising interest rates, high inflation and the war in Europe. The fund lost money in both stocks and bonds.

Norway’s Sovereign Wealth Fund recorded its biggest dollar loss in the first half of the year due to volatility in global markets. The Financial Times reported this in connection with the fund’s message.

The Fund, which is the world’s largest $1.2 trillion public wealth fund, posted a 14.4% loss. Its losses in the first half amounted to $174 billion and were caused by active sales of assets in all sectors except energy. The fund rose 14.5% in 2021 as markets rallied after a global economic recovery.

“Today’s fund is so big that the amounts seem enormous … But we are long-term investors, so we must tolerate such changes,” said Nikolay Tangen, the fund’s chief executive.

It was unusual this time, he said, that the Fund lost money in both stocks and bonds.

Norges Bank Investment Management’s equity portfolio was particularly hard hit in the first half, falling 17%. Parent company Facebook Meta was the biggest contributor to NBIM’s stock market losses in the first half of the year.

“The market was characterized by rising interest rates, high inflation and a war in Europe… Technology stocks performed particularly poorly with a minus 28% yield,” Tangen said.

At the same time, the energy sector grew by 13% due to a sharp increase in prices for oil, gas and refined products.

The sovereign wealth fund, which owns the equivalent of about 1.5% of every listed company in the world, had $36.8 billion in revenue in the first half of 2022.

The Oil Fund was established in 1996 to invest revenue from Norway’s oil and gas industry and is hosted by its central bank.

It was previously reported that Britain’s GDP fell for the first time since the lockdown.

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