OSLO: Norway’s sovereign wealth fund, the world’s biggest, said Friday it had lost more than $43 billion in the third quarter as stock markets plunged and interest rates rose.
Weighed down by its shareholdings, the fund posted a negative return of 4.4 percent in the quarter - a loss of 449 billion kroner ($43.4 billion) - said Norway’s central bank, which manages the fund.
“The third quarter has been characterised by rising interest rates, high inflation, and war in Europe. This has also affected the markets”, the fund’s deputy chief executive Trond Grande said in a statement.
The fund, in which the Norwegian state’s oil revenues are placed, had already posted a dizzying loss of 1.68 trillion kroner in the first half of the year.
The investor, which owns a portfolio of about 9,000 stocks, is trying to navigate a mix of mounting inflation, interest-rate hikes, and losses from the Russia-Ukraine conflict.
In the June-September period, the fund reported a negative return of 4.8 percent on its shareholdings, which represent 68.3 percent of its portfolio.
It saw negative returns of 3.9 per cent on its bond holdings, which make up 28.5 per cent of its assets, and 1.1 per cent on its real estate stake, which accounts for 3.1 per cent.
The Norwegian kroner has weakened against major currencies, which together with Norway’s flourishing oil revenues, has helped limit some of the damage.
The fund, one of the biggest investors in the world with stakes in some 9,400 companies, was still valued at $1.18 trillion at the end of September.
Built from North Sea oil and gas riches, Norway’s wealth fund has been warning about what it sees as a prolonged downturn in markets after achieving an average return of 6 per cent over the quarter of a century during which it’s existed.