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Norway’s government pension fund, known as the “Oil Fund”, lost a record $164 billion last year despite Norway’s largest oil and gas reserves in Europe.File photo via James Jones Jr./Shutterstock
January 31 (United Press International) — Norway’s largest sovereign wealth fund posted a negative return of -14.1%, or $164 billion, last year despite rising oil and gas prices, Norway’s central bank announced Tuesday.
Government Pension Fund Global’s biggest losses came from the fund’s equity holdings and fixed-income investments, which returned -15.3% and -12.1%, respectively.
It was the fund’s worst performance in 14 years – but in line with global equities, which suffered their worst year since 2008.
“Markets are affected by war in Europe, high inflation and rising interest rates,” Norges Bank said in a press release that.
”It’s very unusual for this to have a negative impact on both the stock market and the bond market at the same time.All sectors of the stock market had negative returns, with the exception of energy,” said Nicolai Tangen, chief executive of Norges Bank Investment Management.
The bank credited the krona’s depreciation against several major currencies during last year for helping the fund’s year-end value rise to $1.23 trillion, a $63.8 billion increase. That compares with inflows of $107.8 billion.
The fund is dubbed the “Oil Fund” because it was set up to invest profits from the country’s massive oil and gas industry. More than two-thirds (69.8%) of the fund is invested in equities.
However, the fund did manage to deliver a return of 5.1% on its investments in privately held renewable energy infrastructure and a return of 0.1% on its investments in privately held real estate.
Of the remainder, 27.5% was in fixed income, such as bonds and commercial paper; 2.7% in unlisted real estate; and 0.1% in unlisted renewable energy infrastructure.
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