Norway’s $1.7 Trillion Wealth Fund Reports Tech-Driven Loss
(Bloomberg) — Norway’s $1.7 trillion sovereign wealth fund reported its biggest loss in six quarters in what was a roller-coaster period for markets globally, with the decline largely caused by a drop in the value of technology companies.
Norges Bank Investment Management, the world’s biggest single owner of listed companies, lost 0.6%, or $40 billion, in the first three months of the year, it said in a statement on Thursday. That was the largest decline in its value since the third quarter of 2023.
The fund, largely an index tracker, lost 1.6% on stocks and gained 1.6% on its fixed-income investments. Still, its performance was 0.16 percentage point better than the benchmark in the quarter.
“The quarter has been impacted by significant market fluctuations,” Chief Executive Officer Nicolai Tangen said in the statement. “Our equity investments had a negative return, largely driven by the tech sector.”
The worst of the recent markets turmoil is not reflected in the first-quarter earnings. The fund’s value dropped by about $200 million in the days following US President Donald Trump’s sharp increase in tariffs in early April.
The fund is tech-heavy, with Apple Inc., Microsoft Corp., Nvidia Corp, Alphabet Inc, Amazon.com Inc and Meta Platforms Inc among its biggest investments. It also owns 1.8% of Tesla Inc.
Those holdings have in the past generated stellar returns, including 13% last year. Still, the fund started reducing that position during 2024, partly to reduce the risk of a correction among companies that dominate global stock markets, deputy CEO, Trond Grande, said then.
Because the fund is mainly index-driven, this leaves little room for active investment. Its benchmark index is set by the Finance Ministry and based on the FTSE Global All Cap Index for equities and Bloomberg Barclays indexes for fixed income.
According to the mandate, the fund can manage about 1.45 percentage points actively without following the index. It only used 0.21 percentage points of its leverage last year.
The government deposited 78 billion kroner ($7.5 billion) into the fund during the quarter.
The fund follows a set of ethical guidelines, which contain criteria for the exclusion of companies based on their products or conduct, serious violations of human and labor rights, as well as contribution to severe environmental damage. In addition, the rules exclude investments in companies that produce certain weapons, such as nuclear arms and cluster bombs.
Norway’s conservative opposition party has argued for changing the guidelines to include investments in companies manufacturing nuclear weapons, saying it’s illogical to restrict the wealth fund from investing in businesses such as Lockheed Martin Corp. when Norway buys products from them.
The fund owns stocks in more than 8,600 companies globally. Norway’s Finance Minister Jens Stoltenberg recently announced it will seek to reduce that number by selling off many small cap firms in emerging markets. Given the fund’s size, such changes take time to work through.
–With assistance from Stephen Treloar and Ott Ummelas.
(Updates with details, context from first paragraph.)
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