Norway’s colossal sovereign wealth fund, valued at $1.4 trillion and recognized as the world’s largest, disclosed a 2.1% loss during the third quarter of this year. The losses impacted all asset classes held by the Government Pension Fund Global, amounting to 374 billion Norwegian kroner, equivalent to $34 billion.
Despite the substantial loss, the fund’s performance remained 0.17 percentage points stronger than its benchmark index, offering a glimmer of hope in a challenging market. The previous time the fund reported a quarterly loss was a year ago.
The fund’s setbacks in Q3 can be attributed to broader market concerns about the long-term economic outlook. Trond Grande, the deputy chief executive of Norges Bank Investment Management, noted that the stock market had a weaker quarter, particularly affecting the tech, industrials, and consumer discretionary sectors.
Established in the 1990s, Norway’s sovereign wealth fund was originally intended to invest surplus revenues generated by the nation’s oil and gas sector. Over the years, it has diversified its investments, spanning more than 9,200 companies across 70 countries.
The fund reported a 3.3% quarterly loss on its unlisted real estate investments and a 2.4% loss on renewable energy infrastructure investments during the third quarter.
At the end of Q3, equities made up 70.6% of the fund’s total investments, representing a minor reduction compared to the previous quarter’s holdings.
The fund’s performance will continue to be closely monitored as it navigates through the evolving global economic landscape.