The Government Pension Fund of Norway is composed of two separate government funds. We will talk about the better-known one in the world, as it is the largest fund of its kind in the world. It operates truly globally and invests in thousands of companies.
The fund was created in 1990 to invest surplus income from Norway’s oil sector. It is managed by the Norwegian Central Bank and is intended to serve as an insurance policy for future generations when oil cannot be extracted.
The fund has not performed well despite the rise in commodities
Despite high commodity prices, the fund posted a loss, mainly because equity markets did not perform well. These are having a difficult time due to high inflation around the world and rising base interest rates in response.
The so-called oil fund, which manages the money raised from oil and gas sales in Norway, said this in a statement today.
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The return on investment was minus 14.4%. The result was most negatively affected by the fall in the share prices of US technology companies such as Meta Platforms, Amazon, Apple, Microsoft, and others.
Thus, the technology sector failed the most, where the fund lost 414 billion kroner ($42.6 billion). The second worst sector was consumer discretionary in which the fund lost 254 billion kroner ($26.2 billion). Another loss was recorded in the industrials sector at 193 billion kroner ($19.9 trillion). The energy sector ended in a bigger gain and it brought in 65 trillion kroner ($6.7 trillion).
The biggest cash loss in history
The fund’s only worse percentage performance was in 2008 when it lost 23% for the full year. The financial crisis at the time caused the fund, which was much smaller, to lose 633 billion kroner ($65 billion) for the full year.
The fund is currently worth 11,657 billion kroner ($1.2 trillion).