Norway’s massive sovereign wealth fund isn’t immune from the market volatility that has roiled investors around the world this year. The fund reported today that it lost 1.5% in the first three months of the year, its worst quarterly decline since the third quarter of 2015. It also broke a seven-quarter streak of positive returns.
This sent the value of the fund down by 171 billion kroner ($21 billion), or more once currency fluctuations and withdrawals by the government are factored in. This is quite the turnaround from 2017, when the fund’s value increased by the most in its 20-year history.
The fund’s losses mostly came from its equity investments, which fell by 2.2% in the first quarter. Two-thirds of the fund’s money is invested in shares, with the biggest concentration in the US market, which just recorded its most volatile quarter since 2011. Amid fears about inflation, rising interest rates, and trade protectionism, stocks from every region in the world contributed losses for the Norwegian fund.
One sector, however, helped limit the damage: technology. Despite Facebook’s data-privacy scandal, Tesla’s production delays, and other troubles that plagued tech giants’ shares in the first quarter, the sector was able to eke out a gain for the quarter overall. Internet companies suffered as traders anticipated more regulation in the industry, but expectations of strong earnings for software firms pushed their share prices up.
That said, the fund’s best-performing stock in the first quarter was Amazon, its sixth-largest holding, which it puts in its “consumer services” sector basket. The next-biggest gains were Microsoft (tech) and Netflix (consumer services). The biggest losses came from Nestlé, Facebook, and Wells Fargo.