More than a hundred billion evaporated in an instant from the Norwegian oil fund

The value of Norway’s state-owned oil fund fell by almost two percent in January–March.

In monetary terms, this means a loss of about $137 billion. The news agency reports on the matter Bloomberg.

Deputy CEO of the Norwegian Central Bank Trond Grande says that three key factors contributed to the losses.

Shares in the technology and services sector were swayed by the rapid development of artificial intelligence. The market was also weakened by concerns about the situation in the private loan market and the outbreak of war in the Middle East.

Like other large investors, large technology companies have dominated oil fund returns in recent quarters.

The Norwegian Oil Fund’s largest holdings include Apple, Microsoft, Alphabet, Amazon and Nvidia. The fund owns approximately 1.5 percent of all listed shares in the world.

Part of the decline in the fund’s value can also be explained by exchange rates. The Norwegian krone strengthened in relation to the dollar and the euro at the beginning of the year.

Since the fund’s investments are abroad, the strong domestic currency makes them look less valuable when converted to Norwegian kroner.

No hasty solutions

According to Grande, high energy prices have raised concerns about faster inflation. He also estimates that this will not affect the fund’s portfolio investments.

“We’re not the type of investor to make big short-term changes,” says Grande.

For the long-term investor, the world’s storms also open up opportunities.

Grande notes that the fund’s value increased significantly after it increased its exposure to stocks during the 2008 global financial crisis.

Most of the fund’s money is tied up in stocks that produced a loss.

Fixed income investments and renewable energy projects were also in the red. On the other hand, real estate investments produced a small profit.