Norway’s $1.7 Trillion Wealth Fund Reports Significant Loss
Norway’s sovereign wealth fund, the world’s largest, has announced a substantial $40 billion loss in the first quarter of 2025. The loss is primarily attributed to the depreciation of prominent technology companies within its portfolio, highlighting the impact of recent economic volatility.
The fund, managed by Norges Bank Investment Management, lost 0.6% or $40 billion in the first three months of the year. This represents the largest decline in its value since the third quarter of 2023. Despite the overall loss, the fund’s total performance for the quarter slightly surpassed its benchmark index by 0.16 percentage points.
The fund’s significant exposure to the technology sector, including holdings in Apple Inc., Microsoft Corp., Nvidia Corp., Alphabet Inc., Amazon.com Inc., and Meta Platforms Inc., contributed to the loss. Historically, these technology-focused investments have been a source of considerable gains for the fund, delivering a 13% return in the preceding year. However, in 2024, the fund began to reduce its technology positions to mitigate the risk associated with such concentrated holdings.
“The first quarter of the year has been notably shaped by significant and often abrupt market fluctuations,” commented Chief Executive Officer Nicolai Tangen. “Our investments in equities experienced a negative return during this period, with this downturn being predominantly driven by the performance of the technology sector.”
The fund’s operational framework is largely dictated by its role as an index tracker, limiting the scope for active investment strategies. The fund’s benchmark index is defined by the Norwegian Finance Ministry using the FTSE Global All Cap Index for its equity component and the Bloomberg Barclays indexes for its fixed-income component.
The sheer scale of the fund is evident in its ownership stakes in over 8,600 companies globally. Norway’s Finance Minister Jens Stoltenberg recently outlined plans to strategically reduce this extensive portfolio by divesting holdings in numerous small-cap firms within emerging markets. Given the fund’s immense size and complexity, these proposed changes are expected to be a gradual process.
