Norway's sovereign wealth fund, valued at $2.2 trillion, recorded a 1.9% loss in the first quarter.

      The world's largest sovereign wealth fund, Norway's Government Pension Fund Global, reported a loss of NOK636 billion ($68 billion) in investment returns for the first quarter, primarily due to a decline in large US technology companies' equities. The S&P 500 experienced its most significant quarterly drop since 2022, although the fund slightly outperformed its benchmark.

      Norges Bank Investment Management (NBIM), which oversees the fund valued at about $2.2 trillion, announced a negative return of 1.9% for the first quarter of 2026, marking its first quarterly loss in a year. During the January to March period, the fund recorded a loss of NOK636 billion, exceeding its benchmark index by 0.01 percentage points.

      The overall decline in the fund's value amounted to NOK1.27 trillion ($137 billion), a figure that includes currency fluctuations. As the Norwegian krone appreciated against other major currencies throughout the quarter, the value of the fund's foreign-currency holdings decreased further when converted back to krone.

      Deputy CEO Trond Grande commented, “The result reflects a quarter with challenging market conditions. We saw limited impact on fixed income and real estate, but the drop in equities, especially among large US tech firms, heavily influenced the outcome.”

      The fund allocates roughly half of its assets to US markets and holds substantial stakes in major tech companies such as Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla. US tech stocks experienced a sharp selloff during Q1 2026, contributing to the S&P 500's steepest quarterly decline since 2022, largely due to the geopolitical repercussions of the Iran conflict.

      In late February 2026, the US and Israel conducted coordinated strikes against Iran, leading to a prolonged market selloff, particularly impacting high-multiple growth stocks. These technology firms, known for their elevated price-to-earnings ratios and vulnerability to risk-averse sentiments, rising interest rates, and economic uncertainty, were among the hardest hit.

      Although there has been some recovery in markets since then, losses from Q1 remain. The Norwegian Ministry of Finance, in its 2026 white paper to the Storting, observed that the Iran war caused oil prices to rise while simultaneously lowering the fund's value, an unusual scenario for Norway, which is both a significant oil producer and an equity investor.

      Historically, Norway’s oil revenues have fueled the fund's growth; however, as the fund has grown substantially, its performance has become more dependent on global equity markets rather than oil prices.

      This quarter marks the second consecutive year where significant losses for the fund have been attributed to large US tech companies. In Q1 2025, the fund also experienced losses linked to the tech sector, this time due to the emergence of DeepSeek, which erased $2.7 trillion from US tech giants within weeks.

      This trend highlights the structural concentration risk within the fund’s equity portfolio: as the largest single shareholder in many leading technology companies worldwide, NBIM's quarterly performance is increasingly tied to a limited number of US tech stocks.

      The fund holds around 1.5% of all globally listed equities, meaning that achieving diversification within equity markets is more of a genuine constraint than merely a strategic option.

      Meanwhile, fixed income and real estate provided some support, as NBIM’s fixed income portfolio and unlisted real estate holdings experienced minimal negative effects, consistent with the equity-specific nature of the selloff that did not affect credit markets broadly.

      At the end of Q1, the fund was valued at approximately $2.1 to $2.2 trillion, depending on the dollar/krone exchange rate in use; the dollar-denominated figure of “$2.2 trillion” indicates the fund's size at a more recent time rather than its closing value at the end of Q1.