War, soaring inflation, and rising interest rates all had a severe influence on the equity and bond markets.
Oslo: The world’s largest Norwegian sovereign wealth fund said on Tuesday it posted a loss of NOK 1.637 billion in 2022, citing volatile markets.
“The market has been affected by the war in Europe, high inflation and rising interest rates, which has negatively impacted both the stock and bond markets at the same time, which is highly unusual.” Nicolai Tangen, CEO of Norwegian Bank Investment Management, which manages the fund, said in a statement.
The return on investment was -14.1%.
“Every sector of the stock market had negative returns, except energy,” Tangen said. At the end of 2022, the fund, financed from taxes paid by the country’s oil and gas industry, still amounted to Tk 12.43 trillion (about US$1.2 trillion).
Norway's sovereign wealth fund, one of the world's largest investors, reported a record loss of $164.4 billion for 2022, bringing to an end a three-year run of soaring profits https://t.co/c1AxjCHYuO— Reuters (@Reuters) January 31, 2023
This is still higher than the fund’s holdings at the end of 2021, thanks to 1.09 trillion kroner in new tax inflows.
Currency swings added 642 billion kroner to the fund’s worth.
According to the fund, 69.8% of assets were in equities, 27.5% in fixed income, 2.7% in real estate, and 0.1% in renewable energy infrastructure.