Norway's sovereign wealth fund, the largest in the world, posted a third-quarter loss of $30 billion as a global bond market rout weighed on its fixed-income portfolio.
Norges Bank Investment Management (NBIM), which manages the $2.3 trillion fund, said Thursday the accounting return for the period was a loss of 278 billion kroner ($29.7 billion). Around 70% of NBIM's fixed income portfolio is allocated to government bonds, with the remainder in corporate debt.
Government bond yields surged during the quarter as major central banks, including the U.S. Federal Reserve, began rate-hiking cycles amid concerns about inflation and government debt levels. NBIM's fixed income investments delivered a negative return of 3.5%, which management said was the key driver of the overall downturn. Fixed income accounts for just over a quarter of the fund's entire portfolio, spread across 1,664 bonds in 51 countries.
"The fund's return was close to flat, ending slightly negative as rising interest rates led to weaker results on our fixed-income investments," NBIM's Deputy CEO Trond Grande said in a statement.
Equities, which make up 72% of the fund's holdings, returned 0.5% for the quarter. The fund holds small stakes in around 7,100 companies worldwide, equivalent to 1.5% of all listed companies globally, making it the world's largest single investor. Top holdings include a $65.4 billion stake in Nvidia, along with positions in Apple, Alphabet and Microsoft.