Norway’s sovereign wealth fund, the largest of its kind globally, reported a steep loss of $40 billion in the first quarter, weighed down by a slump in technology stocks and significant currency fluctuations, officials announced on Thursday.
The fund, managed by Norges Bank Investment Management (NBIM), posted a negative return of 0.6% over the three months ending March 31, bringing its total value to 18.53 trillion kroner (roughly $1.7 trillion). Equity investments — which account for 70% of the fund’s portfolio — fell 1.6%, dragging overall performance into the red.
“Our equity investments had a negative return, largely driven by the tech sector,” CEO Nicolai Tangen said in a statement. “The quarter has been impacted by significant market fluctuations.”
A sharp rally in the Norwegian krone exacerbated the decline, slicing 879 billion kroner from the fund’s value due to exchange rate movements. In total, adverse currency effects led to a 1.215 trillion kroner decrease in market value.
Despite the downturn, Tangen struck a resolute tone in remarks to Bloomberg Television. “Large American companies are great long-term investments, so we are very happy to be invested there,” he said, reaffirming the fund’s commitment to its U.S. holdings even amid global trade tensions and policy uncertainty.
The losses follow a volatile stretch for U.S. technology giants — many of which are among the fund’s top holdings. Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla all saw valuations drop in March after a wave of selloffs. The downturn was sparked in part by trade fears and the debut of a low-cost artificial intelligence model from China’s DeepSeek, which rattled investor confidence in the AI arms race.
The impact was particularly acute for Nvidia, whose shares had soared in 2024 on AI optimism, only to slide as competitors emerged.
The fund — which was buoyed last year by record profits of $222 billion — has found itself navigating a dramatically different environment in early 2025. “We’re potentially going into a more inflationary position,” Tangen warned, pointing to the destabilizing effects of tariffs introduced by President Donald Trump in early April.
Fixed-income assets, comprising 27.7% of the portfolio, provided a rare bright spot, returning 1.6% during the quarter. Unlisted real estate holdings, which make up a smaller slice of the fund, delivered a 2.4% gain.
NBIM slightly outperformed its benchmark by 0.16 percentage points, thanks to the modest fixed-income boost. The fund largely follows global indices, with limited discretion for active management. Still, Deputy CEO Trond Grande suggested there is some flexibility during turbulent periods. “That can be nice to have,” he told Bloomberg, referring to limited active leeway.
Norway’s Finance Ministry, which oversees the fund’s mandate, deposited 78 billion kroner into the fund during the quarter. Officials indicated the portfolio may be streamlined, with plans to divest from smaller emerging market firms to focus on larger holdings.
While the fund adheres to strict ethical guidelines, including exclusions for companies involved in nuclear weapons, cluster munitions, and severe environmental or human rights violations, these policies are being contested at home.
Opposition lawmakers have proposed lifting certain bans — particularly around companies like Lockheed Martin — arguing that it’s inconsistent to restrict investments in firms from which Norway also purchases defense equipment.
The fund’s ethical rules remain a hallmark of its governance, though its leadership and Parliament continue to debate their scope.
Established in the 1990s to reinvest surplus oil revenues, the Norwegian sovereign wealth fund now owns stakes in over 8,600 companies across 63 countries. Its sheer size means any shifts in strategy ripple through global markets.
Despite the rocky quarter, Tangen maintained that the long-term strategy remains intact. The fund continues to view U.S. equities as a cornerstone of its portfolio, with technology still a key focus — even after a bruising start to the year.
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