Norway’s Sovereign Wealth Fund Had its Worst Year in Bonds on Record

Posted on 01/31/2023

Norway Government Pension Fund Global (GPFG), which is managed by Norges Bank Investment Management (NBIM), returned -14.1% for the 2022 year. The fund lost an equivalent to -1,637 billion kroner (US$ 165 billion). The wealth fund is a universal owner due to its sheer size.

The return on the fund’s equity investments was -15.3 percent, the return on the fixed income investments was -12.1 percent, whereas investments in unlisted real estate returned 0.1 percent. The return on unlisted renewable energy infrastructure was 5.1 percent. The sovereign wealth fund was allocated to a large silo of government bonds, which many at the time had low interest rates. When interest rates increased in 2022, the value of those bond holdings dropped. Norway’s sovereign wealth fund had its worst year in its fixed income portfolio (according to available data going back to 1998). The performance was worse than the year of the 2008 global financial crisis at -0.54% for the bond portfolio and -1.94% in 2021.

Norway GPFG was also allocated heavily to technology stocks such as Alphabet (Google),, Inc., Apple Inc., and Meta (Facebook).

“The market was impacted by war in Europe, high inflation, and rising interest rates. This negatively impacted both the equity market and bond market at the same time, which is very unusual. All the sectors in the equity market had negative returns, with the exception of energy”, says CEO Nicolai Tangen of Norges Bank Investment Management in a press release.

The krone depreciated against several of the main currencies during 2022. The currency movements contributed to an increase in the fund’s value of 642 billion kroner. Inflow into the fund amounted to 1,085 billion kroner.

The fund had a value of 12,429 billion kroner as of December 31, 2022. 69.8 percent of the fund was invested in equities, 27.5 percent in fixed income, 2.7 percent in unlisted real estate, and 0.1 percent in unlisted renewable energy infrastructure.

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