$830B Fund Suffers Biggest Loss in Years

Wikimedia/Justin.A.Wilcox

Norway's sovereign wealth fund—the biggest buyer of US real estate outside of North America and largest fund overall—just suffered a loss of $32B; it's the fund's biggest loss of  in four years, pulled down by the weight of Chinese stocks and Volkswagen AG.

Its stock holdings dropped 8.6%, despite a 0.9% gain on bonds and 3% return on real estate, marking its first back-to-back quarterly loss in six years.

The $860B fund made its fortune in oil prices over the past decade, which the Norwegian government is preparing to tap into for its first-ever withdrawals of about $440M to make up for budget deficits.

But Q3 was a tumultuous. The period was marked by China's slowdown and the World Index losing 9%, and resulted in the fund losing 21.3% on its Chinese stocks and 16.6% on its emerging market equities.

Fund CEO Yngve Slyngstad says he expects fluctuations in the value of the fund when the market is so volatile. “With the fund as big as it is today, this can have a considerable impact in the short-term. The fund has a long-term horizon, however, and is in a good position to ride out short-term volatility," he adds, insisting there is no need to "sell or anything." [Bloomberg]

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