Record loss reported by world’s largest sovereign wealth fund

Norway’s trillion-dollar state pension fund, NBIM, suffered the biggest loss in its history in the first half of the year, the Financial Times reported on Wednesday, citing an official statement.

According to the report, the fund recorded a loss of $174 billion, or 14.4%. NBIM’s overall value is estimated at $1.2 trillion, making it the largest sovereign wealth fund in the world.

It owns the equivalent of about 1.5% of every listed company on the planet and had inflows of approximately $36.8 billion in the first half of 2022. However, currency and stock movements took a toll on its value. The fund’s equity portfolio was hit especially hard, dropping 17%, with the largest losses arising from NBIM’s investments in Facebook parent Meta. Fixed income investments were down 9.3%, and tech shares in the fund’s portfolio dropped by 28%. Investments in infrastructure projects in the renewable energy sector resulted in a loss of 13.3%. The only sector in which the fund profited significantly was the energy sector, with such investments yielding 13%.

Despite the losses, the fund’s CEO Nikolai Tangen is optimistic about its future.

“The fund is now so big that the sums become very big… But we are a long-term investor, so we have to tolerate these kinds of swings. What was unusual this time is that we lost money both in stocks and bonds,” he said at a press conference.

Still, Tangen warned investors of “tough times” ahead.

“Markets don’t go down in a straight line, and I’m worried that we could have tough times for an extended period. There is a risk that we haven’t seen the worst yet,” he said in an interview with the Financial Times.

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