# Norway’s wealth fund loses $174 billion in first half of 2022
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-17
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Norway's Sovereign Wealth Fund Loses Record $174
Meta Description: Read about how Norway's $1.3 trillion fund fell 14.4% due to global recession, inflation, and tech stock declines.
URL: https://financedigest.com/norways-wealth-fund-loses-174-billion-in-first-half-of-2022html

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By Victoria Klesty

OSLO (Reuters) – Norway’s sovereign wealth fund, the world’s largest, made a loss of 1.68 trillion Norwegian crowns ($174 billion) in the first half of 2022, it said on Wednesday, as stocks and bonds were hit by global recession fears and rampant price inflation.

The $1.3 trillion fund’s return on investment was a negative 14.4% for the January-June period, although that was 1.14 percentage points ahead of the return on its benchmark index.

The market has been characterised by rising interest rates, high inflation, and war in Europe,” said Chief [Executive Nicolai Tangen of Norges Bank Investment Management](https://www.financedigest.com/french-watchdog-fines-h2o-asset-management-executives-over-tennor-investments.html "French watchdog fines H2O Asset Management, executives over Tennor investments"), which operates the fund, in a statement.

[“Technology stocks](https://www.financedigest.com/chatgpt-mania-pumps-up-chinese-ai-technology-stocks.html "ChatGPT mania pumps up Chinese AI technology stocks") have done particularly poorly with a return of minus 28%,” he said.

Founded in 1996, the [fund invests revenue from Norway’s](https://www.financedigest.com/norway-wealth-fund-employee-sues-for-workplace-gender-discrimination.html "Norway wealth fund employee sues for workplace gender discrimination") oil and gas sector and holds stakes in more than 9,300 companies globally, owning 1.3% of all listed stocks.

Its $1.3 [trillion valuation approximately equates to the size of the Mexican economy](https://www.financedigest.com/floods-other-water-related-disasters-could-cost-global-economy-5-6-trillion-by-2050-report.html "Floods, other water-related disasters could cost global economy .6 trillion by 2050 -report"), the world’s 16th largest, according to some measures.

All sectors in which the [fund invests](https://www.financedigest.com/norway-wealth-fund-to-consider-investing-in-unlisted-equities.html "Norway wealth fund to consider investing in unlisted equities") recorded negative returns in the first half, apart from energy, where returns were 13% as prices soared following Russia’s invasion of Ukraine.

Central banks have hiked interest rates aggressively this year to combat inflation, leading to increased borrowing [costs and lowered](https://www.financedigest.com/bmw-bets-on-design-and-recycling-not-mining-to-lower-battery-costs.html "BMW bets on design and recycling, not mining, to lower battery costs") profit margins for corporations.

The tech-heavy Nasdaq Composite and the broader S&P 500 index saw their [biggest January-June declines since the financial crisis](https://www.financedigest.com/biggest-uk-house-price-fall-recorded-since-financial-crisis.html "Biggest UK house price fall recorded since financial crisis"), while U.S. and [European government bond markets](https://www.financedigest.com/explainer-why-european-money-market-funds-inflows-are-lagging-behind-the-u-s-torrent.html "Explainer-Why European money market funds inflows are lagging behind the U.S. torrent?") had their worst start to any year in decades.

In total, 68.5% of the fund was invested in equities at the end of June, with 28.3% in fixed income, 3.0% in unlisted [real estate](https://www.financedigest.com/gold-london-real-estate-and-the-theresa-may-effect.html "GOLD, LONDON REAL ESTATE AND THE THERESA MAY EFFECT") and 0.1% in unlisted renewable energy infrastructure.

($1 = 9.6716 Norwegian crowns)

(Reporting by Victoria Klesty; Editing by Terje Solsvik and Mark Potter)


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