in 2022 the return is negative by 14.1% – Corriere.it

It was not the worst performance in percentage terms (minus 23.3% recorded in 2008, the year of the great financial crisis, remains distant) but the loss recorded in 2022 by the Norwegian sovereign fund, the largest in the world, the highest ever: 1.637 trillion Norwegian kroner, equal to 151.7 billion euros, due to the impact of inflation and the increase in interest rates but also the repercussions related to the war in Ukraine and the strong correction on the markets of the technology sector. Last year the return on investments of the Norwegian fund was so negative of 14.1%, in percentage terms the worst since 2008, when it was lower for the fund’s assets and thus translated into a red of around 71 billion EUR.

Bucking

However, Oslo reports that the performance in the year was 0.88% higher (just over 10 billion euro) than that of the reference index). Notably, the fund was down 15.3% in the case of the entity’s equity portfolio, which represented 69.8% of the investment vehicle’s exposure to Norway. For its part, the fixed income portfolio, which represented 27.5% of the fund’s exposure, offered a negative return of 12.1% during the year, while unlisted real estate investments, 2.7% of the portfolio, recorded a positive return of 0.1%. In the case of the Norwegian sovereign wealth fund’s investments in unlisted renewable infrastructure, with a weight of 0.1% in the entity’s portfolio, the return for the year was 5.1%.

The causes

The market was affected by the war in Europe, high inflation and rising interest rates. This negatively impacted both the equity and bond markets, which is highly unusual, said Nicolai Tangen, CEO of Norges Bank Investment. All sectors of the stock market had negative returns except energy, he added. On the other hand, the fund indicated that the Norwegian krone depreciated against many major currencies during the year, increasing the fund’s value by 642,000 million kroner (59,518 million euros). At the end of the year, the value in kroner of the investment vehicle was thus 12.42 trillion (about 1,148 billion euro).