Quarterly Loss of 40 Billion US Dollars! Norway's Trillion Sovereign Wealth Fund Reports Largest Loss in Year and a Half, Heavy Tech Stock Plunge the Main Cause

During a period of rollercoaster-like fluctuations in the global market, Norway's $1.7 trillion sovereign wealth fund saw its largest loss in six quarters, with the main reason being a drop in the value of tech companies. Norway's central bank investment management company, the largest single owner of publicly traded companies in the world, announced on Thursday that the fund lost 0.6% (about $400 billion) in the first three months of this year, marking the largest decline since the third quarter of 2023. The fund, which mainly tracks indices, experienced a 1.6% loss in stock investments, while fixed-income investments yielded a profit of 1.6%, still outperforming the benchmark index by 0.16 percentage points. CEO Nicolai Tangen stated in the announcement, "This quarter was significantly affected by market volatility. Our stock investments had negative returns, mainly due to the tech sector." However, the market turmoil sparked by President Trump's significant tariff increase in early April has not yet been reflected in the first quarter performance. The tech-heavy fund mainly holds stakes in giants like Apple, Microsoft, Nvidia, Google parent company Alphabet, Amazon, Meta, and also has a 1.8% stake in Tesla. Although these holdings brought in a remarkable 13% return last year, Deputy CEO Trond Grande previously mentioned that they had started reducing their tech holdings in 2024, partly to mitigate the risk of a downturn in these companies that dominate the global stock market. Norway's sovereign wealth fund primarily invests in stocks and bonds. Due to the fund's mainly passive investment approach, the scope for active management is limited. The benchmark index is set by the Ministry of Finance, with the equity portion following the FTSE Global All-Cap Index and the fixed-income portion referencing the Bloomberg Barclays Index. According to the mandate, the fund can deviate actively by around 1.45 percentage points, but only used 0.21 percentage points last year. The Norwegian government injected 78 billion kroner (about $7.5 billion) into the fund this quarter. Following ethical guidelines, the fund can exclude investments in companies based on criteria such as product type, severe human rights and labor rights violations, and significant environmental damage, and is prohibited from investing in specific weapons manufacturers like nuclear weapons and cluster bombs. However, the Norwegian Conservative Party opposition recently proposed changes to the guidelines, arguing that since the Norwegian government buys military equipment from companies like Lockheed Martin, restricting the sovereign fund from investing in these companies is illogical. Currently, the fund holds stocks in over 8,600 companies globally. Norwegian Finance Minister Jan Tore Sanner recently announced plans to streamline the investment portfolio by reducing holdings in small-cap stocks in emerging markets. Given the fund's massive scale, such adjustments will need to be implemented gradually.