World’s Largest Sovereign Wealth Fund Loses US$30 Billion

Jakarta, CNBC Indonesia — Norway’s sovereign wealth fund, the largest in the world, recorded investment losses of US$30 billion in the third quarter.

According to CNBC International, the losses came amid turbulence in global bond markets as rising interest rates weighed on returns from fixed-income investments.

Norges Bank Investment Management (NBIM), which manages the fund, reported an accounting loss of 278 billion Norwegian kroner, equivalent to US$29.7 billion, over the period. NBIM manages investments worth US$2.3 trillion.

Around 70% of Norway’s sovereign wealth fund’s fixed-income portfolio is allocated to government bonds, with the remainder invested in corporate debt. Rising interest rates have put pressure on the bond portfolio because they can reduce the market prices of existing bonds.

The losses underscore the impact of bond-market volatility on the management of large-scale investment funds, particularly when interest-rate changes affect the value of fixed-income assets.