Norway’s wealth fund, one of the world’s largest investors, posted a record loss of 1.64 trillion crowns ($164.4 billion) for 2022, bringing to an end a three-year run of soaring profits as stocks and bonds were hit by the Ukraine war and inflation.
The previous largest loss was 633 billion crowns in 2008.
“The market was impacted by war in Europe, high inflation, and rising interest rates,” Chief Executive Nicolai Tangen said in a statement on Tuesday.
“This negatively impacted both the equity market and bond market at the same time, which is very unusual.”
The loss ends a record-breaking streak for the fund, where annual returns exceeded one trillion crowns in each of the three years from 2019 to 2021, amounting to more than four trillion crowns combined.
Still, despite the record loss, the value of the fund rose overall, by 89 billion crowns or $8.9 billion year-on-year, partly due to the weak Norwegian currency and partly due to record 1.1 trillion crowns of cash inflows into the fund.
The inflows in 2022 were nearly three times the previous record, of 386 billion crowns, set in 2008.
The fund invests the Norwegian state’s revenues from petroleum production. As a major crude exporter and Europe’s largest gas supplier after a drop in Russian gas flows, Norway benefited from high energy prices due to the war in Ukraine.
The fund holds stakes in around 9,300 companies globally, owning 1.3% of all listed stocks. It also invests in bonds, unlisted real estate and renewable energy projects.
The fund’s return on investment in 2022 stood at minus 14.1% for the year, which was 0.88 percentage point better than the return on the fund’s benchmark index.
The return on the fund’s equities was minus 15.3%, while it was minus 12.1% on fixed-income investments. It earned a positive 0.1% return on unlisted real estate and 5.1% for renewable energy projects.
