The world’s biggest single owner of equities lost more than $200 billion in 2022, its biggest loss since the 2008 financial crisis.
Norway’s $US1.3 trillion sovereign wealth fund reported its biggest loss since the 2008 financial crisis after markets were pummelled by faster inflation, higher credit costs and the fallout from the war in Ukraine.
Chief executive officer Nicolai Tangen has spent the past year warning that the fund’s growth over the last 25 years isn’t likely to continue in an environment of rising borrowing costs and soaring inflation that have brought equities down from all-time highs.“We are now in a very different situation,” Mr Tangen said in a Bloomberg TV interview. “You are seeing a reversal of globalisation, you’re seeing rates having moved up, and it’s of course very unclear where they’re going from here.
The fund is largely an index-tracker, investing according to a strict mandate from the Finance Ministry. It seeks to make the most of its limited leeway to try to beat the benchmark it is measured against, something it has managed in eight of the last 10 years. “It’s very, very important for a very large fund like this to be quite index-near because the thing is, if you are too far away from the index, and you make big mistakes, the losses are going to be so big that nobody’s ever going to keep their job,” Mr Tangen said in the TV interview. “It needs to be anchored with politicians and in the parliament.”Mr Tangen has beefed up the fund’s stocks team in preparation for a prolonged downturn and in December unveiled a three-year plan to stem its losses.
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