World's largest wealth fund loses $40B in Q1
What's the story
The world's largest sovereign wealth fund, Norges Bank Investment Management (NBIM), has reported a first-quarter loss of 415 billion kroner ($40 billion) for 2025. CEO Nicolai Tangen attributed the massive downturn to weakness in the tech sector. He said, "The quarter has been impacted by significant market fluctuations. Our equity investments had a negative return, largely driven by the tech sector."
Financials
Fund's value and investment breakdown
As of March 31, the fund's total value was 18.53 trillion kroner, with 70% of its investments in equities. However, this asset class posted a loss of 1.6%. The fund's market value fell by 1.215 trillion kroner in the first quarter, mainly due to adverse currency movements. "The krone strengthened against several of the main currencies during the quarter," said NBIM in a statement.
Diversification
Other investments and returns
Apart from equities, fixed incomes make up 27.7% of the fund's holdings, returning 1.6% in the first quarter. Unlisted real estate makes up 1.9% of assets and gave 2.4% gains. Despite the overall loss in Q1, NBIM's performance was 0.16% better than its benchmark. Managed by NBIM on behalf of Norway's population, the fund invests in over 8,600 companies across sectors globally including US tech giants Meta, Alphabet, Amazon, NVIDIA, Tesla, and Microsoft.
Market trends
Impact of US-China trade tensions on tech sector
The latest slump in the tech sector comes after a three-week sell-off of major industry players in March, which wiped $2.7 trillion off their market value. This came amid growing concerns over the impact of US President Donald Trump's tariff policies. The situation was worsened by a January tech sell-off triggered by an AI model developed by China's DeepSeek, costing firms like NVIDIA dearly.
Strategy
Norway's government deposits and future plans
In the first quarter, the Norwegian government deposited 78 billion kroner ($7.5 billion) into NBIM. The fund is an index-driven entity with its benchmark index set by the country's finance ministry on the basis of FTSE All Cap Global Index for equities and Bloomberg Bond Index for fixed income. Recently, Norway's Finance Minister Jens Stoltenberg announced they plan to reduce their exposure to small cap firms in emerging markets, given the size of the fund.