Norway's Giant Money Fund Lost $30 Billion Last Summer

Norway has a special savings fund worth about $2.3 trillion — that's $2,300,000,000,000 — built from money the country earns by selling oil and gas. In the summer of 2024, that fund lost about $30 billion in just three months. The fund's leaders say they had been careful about investing in tech companies and the stock market overall, and those choices played a role in how the fund performed.

The fund, which is based in Oslo, Norway, is the biggest single investor in the world. On average, it owns about 1.5% of every company listed on stock markets around the globe. That means if you added up the shares of every public company on Earth, Norway's fund would own a small slice of almost all of them. It invests in about 7,100 companies, as well as bonds, real estate, and clean energy projects.

The fund's deputy CEO, Trond Grande, spoke to reporters after the results came out. He said the fund had been 'a little bit cautious' about the stock market and about some of the biggest technology companies. This means the fund owned slightly fewer shares in those companies than a standard guide, called a benchmark index, would suggest. A benchmark index is like a recipe that tells the fund how much of each stock to hold.

The fund is required to follow a benchmark set by Norway's finance ministry. However, it has a little bit of room to own more or less of certain stocks than the benchmark says. When a fund owns less of a stock than the benchmark, it is called being 'underweight.' Grande said the fund had been underweight on some tech stocks for 'quite a while' and had no plans to change that for now.

The biggest reason for the fund's losses was rising interest rates. When interest rates go up, the value of bonds — loans made to governments and companies — usually goes down. About one quarter of the fund's money is invested in bonds, and those investments fell in value during the summer months. This pulled the fund's overall return down to minus 0.5%, meaning it lost a small percentage of its total value.

Grande also talked about the risks of investing in artificial intelligence, or AI, companies. He said there has been a lot of ups and downs in AI stocks, from the companies that build AI models to the ones that make computer chips and provide electricity for data centers. He warned that if something went wrong with AI technology, it could hurt the stock market. However, he said he did not think that risk was large enough to threaten the whole financial system.

Even with the losses, fund leaders say they feel good about how the fund is set up. Grande said the team reviews its choices all the time and that nothing is permanent. Norway uses this fund to save money for future generations, so it is built to handle short-term losses and keep growing over many years.