The world's largest sovereign wealth fund loses $174 billion in the first half, cites inflation and war in Europe

1 month ago

Norway's cardinal bank, besides known arsenic Norges Bank, successful Oslo, Norway.

Kristian Helgesen/Bloomberg | Bloomberg | Getty Images

Norway's sovereign wealthiness fund, the largest successful the world, made a nonaccomplishment of 1.68 cardinal Norwegian kroner ($174 billion) successful the archetypal fractional of 2022, arsenic stocks markets much broadly saw a tumultuous six months.

The $1.3 trillion money returned a antagonistic 14.4% during the period, arsenic stocks and bonds reacted violently to planetary recession fears and skyrocketing inflation. But the fund's instrumentality was 1.14 ground points amended than the instrumentality connected the benchmark index, the country's Norges Bank said Wednesday, equivalent to 156 cardinal kroner.

"The marketplace has been characterised by rising involvement rates, precocious inflation, and warfare successful Europe. Equity investments are down with arsenic overmuch arsenic 17 percent. Technology stocks person done peculiarly poorly with a instrumentality of -28 percent," the CEO of Norges Bank Investment Management, Nicolai Tangen, said successful a release.

The fund's instrumentality connected equity investments slipped 17%, portion fixed income investments and unlisted renewable vigor infrastructure were down 9.3% and 13.3%, respectively. 

Norway's immense North Sea lipid and state reserves are the bedrock of the fund's wealth. Energy was the lone assemblage to not spot antagonistic returns aft the money made huge investments successful upwind powerfulness successful caller years.

"In the archetypal fractional of the year, the vigor assemblage returned 13 percent. We person seen crisp terms increases for oil, gas, and refined products," Tangen added.

The nonaccomplishment is connected inclination with the U.S. banal marketplace experiencing its worst first-half since the 1970s. Inflation, involvement complaint hikes and warfare successful Europe earnestly dented the large U.S. indexes, with the Dow Jones Industrial Average losing much than 15% successful the archetypal six months of the year, the S&P 500 down much than 20% and the Nasdaq Composite down astir 30%.