Key Takeaways
- • Norway's Government Pension Fund Global posted a loss of 278 billion kroner (about $29.7 billion) for the July-to-September 2026 quarter, according to Norges Bank Investment Management (NBIM).
- • The fund returned -0.5% in the quarter, 0.18 percentage points below its benchmark, as fixed-income investments fell 3.5% while equities rose 0.5%.
- • Rising government bond yields, following rate increases by several central banks including the U.S. Federal Reserve, drove the bond losses.
- • Fund value fell to 22.01 trillion kroner on Sept. 30, with a stronger krone accounting for 472 billion kroner of the decline.
- • NBIM has proposed cutting its government bond allocation from 70% to 50%, and a Ministry of Finance expert group is due to report by January 2027.
Summary
Norway's sovereign wealth fund, the world's largest, posted a loss of 278 billion kroner for the July-to-September period, equivalent to roughly $29.7 billion, Norges Bank Investment Management (NBIM) said on Thursday. The Government Pension Fund Global returned -0.5% in the quarter, trailing its benchmark index by 0.18 percentage points.
The decline was concentrated in fixed income, which returned -3.5% as climbing borrowing costs reduced the value of the bond portfolio. Government bond yields rose over the three months following rate increases by several central banks, among them the U.S. Federal Reserve. Equities returned 0.5%, though sector performance diverged sharply. Deputy CEO Trond Grande said energy companies rose the most as oil prices climbed amid the ongoing conflict between the U.S. and Iran, while interest-rate-sensitive sectors such as utilities and real estate fell.
The fund's total value dropped by 670 billion kroner to 22.01 trillion kroner as of Sept. 30. According to NBIM, a stronger krone reduced the value by 472 billion kroner, while 80 billion kroner was added after management costs. At quarter-end, equities made up 72.1% of the portfolio, fixed income 25.8%, unlisted real estate 1.6% and unlisted renewable energy infrastructure 0.5%. Real estate returned 0.4% and renewable energy infrastructure returned 7.5% over the period.
The quarterly loss follows a record first half, in which NBIM posted a profit of roughly $184.9 billion, driven by gains in Asian technology and semiconductor stocks. Looking ahead, NBIM has proposed reducing the government bond share of its portfolio from 70% to 50%, which would lower its U.S. Treasury holdings from 34.1% to 21.9% of its bond index. The Ministry of Finance has commissioned an expert group to assess the fund's overall strategy, with a report due by January 2027.
The decline was concentrated in fixed income, which returned -3.5% as climbing borrowing costs reduced the value of the bond portfolio. Government bond yields rose over the three months following rate increases by several central banks, among them the U.S. Federal Reserve. Equities returned 0.5%, though sector performance diverged sharply. Deputy CEO Trond Grande said energy companies rose the most as oil prices climbed amid the ongoing conflict between the U.S. and Iran, while interest-rate-sensitive sectors such as utilities and real estate fell.
The fund's total value dropped by 670 billion kroner to 22.01 trillion kroner as of Sept. 30. According to NBIM, a stronger krone reduced the value by 472 billion kroner, while 80 billion kroner was added after management costs. At quarter-end, equities made up 72.1% of the portfolio, fixed income 25.8%, unlisted real estate 1.6% and unlisted renewable energy infrastructure 0.5%. Real estate returned 0.4% and renewable energy infrastructure returned 7.5% over the period.
The quarterly loss follows a record first half, in which NBIM posted a profit of roughly $184.9 billion, driven by gains in Asian technology and semiconductor stocks. Looking ahead, NBIM has proposed reducing the government bond share of its portfolio from 70% to 50%, which would lower its U.S. Treasury holdings from 34.1% to 21.9% of its bond index. The Ministry of Finance has commissioned an expert group to assess the fund's overall strategy, with a report due by January 2027.
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