Norway’s Norges Bank Investment Management suffers $164 billion in damage

After forecasting that inflation would become the main threat to capital markets in 2021, NBIM moved its equity portfolio to an underweight position in equities, bond duration and credit and an overweight position in integrated energy and mining companies. That bet helped it outperform its benchmark by 0.74 percentage points in 2021 and 0.88 percentage points in 2022.

“For a very big fund like this, it’s very, very important to be fairly index-consistent because the thing is, if you’re too far from the index and you make big mistakes, the losses are going to be so big that nobody ever does.” will keep their job,” said Tangen in the TV interview. “It must be anchored in politics and in parliament.”

Tangen has strengthened the fund’s equities team in preparation for a prolonged downturn, unveiling a three-year plan to stem its losses in December. The key to beating the benchmark will be “getting the fund to become more long-term, contrarian and more active on negative selection,” he said at the time.

The Fund is the world's largest single owner of equities.

The Fund is the world’s largest single owner of equities.Credit:Bloomberg

The fund aims to spend Norway’s oil and gas proceeds to drive a green transition and is considering investing in renewable energy storage and transmission for the future to expand the range of renewable infrastructure it is poised to hold. It recognized that this is a competitive environment.

Over the past year, NBIM reduced its holdings in the world’s largest oil and gas companies, taking profits after a surge in energy prices in 2022. It bought big tech and pharmaceutical companies and increased stakes in the four real estate companies it owns, the largest absolute positions among real estate stocks as markets fell.


The fund has also recommended adding longer-term unlisted stocks to boost returns. While the fund is not currently permitted to make such investments, “we are seeing increasing evidence that a greater proportion of the value creation is taking place in the unlisted market,” it said publicly in a letter to the Treasury Department earlier this year.

The government paid 1.1 trillion kroner ($160 billion) into the fund last year.

Bloomberg Norway’s Norges Bank Investment Management suffers $164 billion in damage

Brian Lowry

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