Norway’s $2.3 Trillion Sovereign Wealth Fund Posts $29.7 Billion Third-Quarter Loss on Bond Weakness
Summary
- Norway’s sovereign wealth fund, the world’s largest, said it posted a 278 billion kroner loss in the third quarter.
- The fund said bond investment performance was weak because of rising bond yields and a plunge in global bond prices.
- The fund said its portfolio allocation is 72.1% stocks and 25.8% bonds, and that it is invested mainly in U.S. tech stocks including Nvidia and Apple.
Forecast Trend Report by Period
Third-quarter loss of 278 billion kroner as global bond prices tumbled
Portfolio allocation stands at 72.1% stocks and 25.8% bonds
Equity holdings are concentrated in U.S. tech names including Nvidia and Apple
Norway’s sovereign wealth fund, the world’s largest, said on Oct. 22 that it posted a loss of 278 billion kroner, or about $29.7 billion, in the third quarter.
Trond Grande, deputy chief executive of Norges Bank Investment Management, which runs the fund, said in a statement that bond investments performed poorly as yields rose. He added that the sharp drop in global bond prices in the third quarter, driven by inflation and concerns over large government debt loads, had a major impact on returns.
The fund managed 22.04 trillion kroner, or about $2.3 trillion, as of Sept. 30. Its portfolio was made up of 72.1% equities and 25.8% bonds. Equities returned 0.5% in the quarter, while bonds lost 3.5%.
The fund holds 1,664 bonds across 51 countries. About 70% of those holdings are government debt. Last month, it said it planned to reduce its holdings of U.S. Treasuries.
Its biggest investments are in U.S. technology stocks, including Nvidia, Apple, Alphabet and Microsoft.
Lee Mi-a, Hankyung.com reporter mia@hankyung.com
Korea Economic Daily
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