The Norwegian Sovereign Wealth Fund, the world's largest with assets around $1.5 trillion, reported a loss of approximately €34.9 billion in the first quarter of 2025. This downturn was primarily due to declining technology stock prices and weak U.S. market performance. The fund's equity portfolio decreased in value by 1.6%, although fixed income and real estate investments saw slight gains.
Fund manager Nicolai Tangen described the quarter as one of "significant market volatility." Nearly 60% of the fund's equity portfolio is invested in U.S. stocks, which underperformed compared to European stocks. The MSCI USA Index fell by 5.2%, whereas the MSCI Europe Index rose by almost 10%. However, European stocks, comprising only 22% of the fund's portfolio, couldn't offset the losses. Major contributors to the loss were large tech stocks like Apple, Microsoft, and Nvidia, which collectively make up about 17% of the fund's holdings.
Despite these challenges, the fund plans to increase its investment in U.S. stocks, diverging from other investors who are withdrawing from the market. Tangen announced this strategy at a press conference, indicating a long-term confidence in U.S. economic recovery. The fund's current U.S. stock weighting is below its benchmark, the FTSE Global All Cap Index, which allocates about 63% to U.S. stocks. With ownership of approximately 1.5% of all globally issued stocks, the fund's strategic shift could influence market trends.
