Norway’s wealth fund posts record $233 billion loss

Norway’s wealth fund, one of the world’s largest investors, has posted a record loss of 1.64 trillion crowns ($A233 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 during the 2008 financial crisis.

“The market was impacted by war in Europe, high inflation and rising interest rates,” chief executive Nicolai Tangen said 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 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 more than 9000 companies globally, owning 1.3 per cent of all listed stocks. 

It also invests in bonds, unlisted real estate and renewable energy projects.