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HomeLatest NewsNorway's sovereign wealth fund suffers its worst year in performance since 2008

Norway’s sovereign wealth fund suffers its worst year in performance since 2008

Date: March 28, 2024 Time: 18:28:52

The largest sovereign wealth fund in the world suffers the consequences of the ‘horribilis’ 2022 for the markets. The Norwegian Government Global Pension Fund has posted a record loss of NOK 1.63 trillion (about €151.763 million). The Russian invasion of Ukraine, high inflation and rising interest rates have dragged this giant into the red. The firm also has high exposure to the technology sector, whose valuations have posted a sharp correction.

Specifically, the profitability of its investments has experienced a fall of 14.1%, its biggest drop since 2008, the beginning of the bursting of the real estate bubble, when the recovery reached 23.3%. The high weight of equities in its portfolio, with an exposure that is close to 70%, have contributed to this collapse, after losing more than 15%.

“The market has been affected by the war in Europe, high inflation and rising interest rates. This has had a negative impact on both the stock and bond markets at the same time, which is very unusual. “, has specified the CEO of Norges Bank Investment Management, Nicolai Tangen, who highlights the energy sector as the only one that has been saved from the turbulence.

As regards fixed income, which represents slightly less than a third of the portfolio, it has also contracted by 12.1%. Only investments in unlisted infrastructure, a sector in which it has a residual stake (+0.1%), has achieved a return of 5.1%. For its part, real estate that is not listed on the stock market barely contributed a modest gain of 0.1%.

In their accounts, the depreciation of the local currency also stands out, which has contributed to raising the value of the fund by 642,000 million crowns (59,518 million euros). At the end of the year, the value in crowns of the investment vehicle was 12.42 trillion (1.15 trillion euros). The firm, which allocates revenue from gas and oil abroad and is managed by the entity attached to the Norwegian central bank, NBIM, had a value of 12.4 trillion Norwegian crowns (about 1.13 trillion euros). .

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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