Norway's largest sovereign wealth fund in the world said it lost 1.68 trillion Norwegian crowns ($174 billion) in the first half of 2022, as global recession fears and rampant price inflation hit stocks and bonds.
According to Arab Net, CEO Nikolai Tangin of Norges Bank Investment Management, who manages the fund, said in a statement: The market was marked by high interest rates, inflation, and the war in Europe.
He added, “Tech stocks have performed particularly badly with a negative return of 28%.
Established in 1996, the fund invests proceeds from the Norwegian oil and gas sector, and owns stakes in more than 9,300 companies globally, and 1.3% of all listed shares.
The fund's investment return for the first six months of the year is $1.3 trillion, roughly the size of Mexico's economy, the world's 16th largest, by some measures.
All sectors in which the fund invests recorded negative returns in the first half, with the exception of energy, where sector returns were 13% with higher prices after the Russian invasion of Ukraine.
Central banks have aggressively raised interest rates this year to combat inflation, which has increased borrowing costs and lowered corporate profit margins.
The tech-heavy Nasdaq Composite and S&P 500 saw their widest January-June decline since the financial crisis, while US and European government bond markets had their worst start in any year in decades.
In all, equities made up 68.5% of the Norwegian fund's investment at the end of June, with 28.3% in fixed income, 3.0% in unlisted real estate, and 0.1% in unlisted renewable energy infrastructure.
