Norway’s sovereign wealth fund, the world’s largest, reported a negative return of 0.6 percent in the first quarter of 2025, translating to a staggering loss of 415 billion Norwegian kroner ($39.7 billion). The decline was attributed primarily to turmoil in global equity markets, particularly within the technology sector.
Nicolai Tangen, the fund’s CEO, explained in a statement on Thursday that “the quarter has been impacted by significant market fluctuations,” adding that “our equity investments had a negative return, largely driven by the tech sector.”
Established in the 1990s to manage the country’s petroleum revenues, the fund is valued at over $1.5 trillion and invests in more than 9,000 companies across the globe. It holds approximately 70 percent of its portfolio in equities, with the remainder in fixed income, real estate, and renewable energy infrastructure. The fund is considered a benchmark for ethical investing and long-term fiscal prudence.
Despite its sheer size and historical resilience, the fund is not immune to global economic shifts. Tech stocks, which have led the fund’s gains in recent years, experienced a notable downturn in Q1 2025, influenced by investor concerns over interest rates, regulation, and declining earnings forecasts. This reversal has delivered a significant blow to the fund’s equity-heavy portfolio.
Tangen emphasized that volatility is part of long-term investing: “We have to accept that the markets go up and down. The important thing is to stay invested and focused on our long-term strategy.”
Norway’s government relies on limited withdrawals from the fund to finance parts of its national budget, and the loss is unlikely to affect short-term spending. However, the dip may spark discussions about the sustainability of current fiscal practices if negative returns persist.
This setback follows a strong performance in 2024, when the fund posted a robust annual return. With markets remaining uncertain, especially in the tech sector, fund managers are expected to monitor asset allocations closely in the months ahead.
The fund’s Q1 results serve as a stark reminder of the complexities and risks involved in managing such a vast, globally diversified investment portfolio.
