Norway Sovereign Wealth Fund Reports $29.7 Billion Quarterly Loss

Norges Bank Investment Management reported a $29.7 billion loss for the third quarter, reversing a record first-half profit of nearly $185 billion. The downturn resulted primarily from a 3.5% negative return on fixed-income investments, as interest rate hikes from central banks, including the United States Federal Reserve, triggered a global bond market rout.

Equity returns remained nearly flat at 0.5%. While energy stocks provided support amid the U.S.-Iran war, these gains were offset by losses in real estate and utilities. Deputy CEO Trond Grande noted that rising interest rates led to weaker results on fixed-income investments and that equity returns varied significantly between sectors.

In response to the volatility, the fund manager plans to reduce its allocation to government-issued debt, specifically cutting its holdings of U.S. Treasuries. CEO Nicolai Tangen cautioned that the fund should not expect the same level of returns moving forward as it experienced over the previous six months.