The Blubber

Norway’s sovereign wealth fund, the largest in the world, posted its steepest quarterly loss in a year and a half, hit hard by the tech sector’s downturn and global market volatility.

In the first quarter of 2025, the fund recorded a negative return of 0.6%, amounting to a $40 billion loss, according to a statement from Norges Bank Investment Management. This marks its worst performance since Q3 of 2023. Equities, which make up the bulk of the fund’s holdings, declined 1.6%, with technology stocks dragging performance down the most. On the other hand, fixed-income assets gained 1.6%, slightly cushioning the blow and allowing the fund to outperform its benchmark by 0.16 percentage points.

Despite the weak showing from U.S. markets, particularly amid rising concern over protectionist trade policies and escalating tariffs, the fund plans to keep adding to its American stock positions. CEO Nicolai Tangen emphasized that the long-term outlook for U.S. companies remains strong.

“Major American firms are solid long-term plays, and we’re glad to have a stake in them,” Tangen told Bloomberg TV on Thursday.

The fund’s top holdings include tech giants such as Apple, Microsoft, Nvidia, Alphabet, Amazon, and Meta — along with a position in Tesla. These investments helped power a 13% gain last year, though the fund has taken a more cautious stance on them for the past 18 months, according to Deputy CEO Trond Grande.

The latest figures don’t fully reflect the more recent market upheaval triggered by President Trump’s tariff hikes in early April, which could have further implications down the road.

“We may be entering a more inflationary environment,” Tangen warned during the Bloomberg interview. “Higher tariffs have a direct inflationary effect — and that’s bad news for the markets.”

Tangen added that the fund is maintaining a neutral stance on U.S. Treasuries, with no significant changes in its exposure there.