Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund, has reported an investment loss of 278 billion Norwegian kroner (about €26.4 billion) in the third quarter of 2026, with an overall return of minus 0.5 per cent.
Norges Bank Investment Management (NBIM), which manages the fund, said the result was driven primarily by a 3.5 per cent negative return on fixed-income investments.
Fixed income accounts for 25.8 per cent of the portfolio, of which around 70 per cent is allocated to government bonds.
Equity investments returned 0.5 per cent, unlisted real estate 0.4 per cent and unlisted renewable energy infrastructure 7.5 per cent.
The fund’s return was 0.18 percentage points below its benchmark index.
Deputy chief executive Trond Grande said: “The fund’s return was close to flat, ending slightly negative as rising interest rates led to weaker results on our fixed-income investments. Equity returns were also close to zero, but there were large differences between sectors. Energy companies rose the most, while interest-rate-sensitive sectors such as utilities and real estate fell.”
The fund has for some time held small underweight positions in several of the largest technology companies, Grande told Reuters, citing the volatility of prices linked to artificial intelligence. Technology accounted for about 23 per cent of its holdings at the end of June.
The fund’s total value fell by 670 billion kroner (about €63.7 billion) during the quarter to 22,014 billion kroner (around €2.1 trillion) at the end of September.
The accounting return contributed a 278 billion kroner loss, while a stronger Norwegian krone reduced the value by a further 472 billion kroner (about €44.9 billion).
Inflows of 80 billion kroner (about €7.6 billion) after management costs partially offset the decline.
The quarter interrupted a strong run. The fund returned 9.4 per cent in the first half of 2026, measured in its currency basket.
The result occurred against a backdrop of global bond market turbulence.
Government bond yields rose as major central banks, including the US Federal Reserve and the European Central Bank, raised interest rates amid concerns over inflation and elevated government debt levels.
The Federal Reserve lifted its target range to 3.75-4 per cent on September 16, its first increase since 2023. The ECB had raised its deposit facility rate to 2.5 per cent on September 10, a second quarter-point rise in 2026, after eurozone inflation reached 3.3 per cent in August, its highest level since September 2023. The ECB linked that pressure to energy costs and the conflict in the Middle East.
Higher market yields reduce the market value of existing bonds, which form a substantial portion of the fund’s fixed-income holdings. The fund is invested in 1,664 bonds across 51 countries.
In September, NBIM proposed reducing the weighting of government bonds in its benchmark bond index from 70 per cent to 50 per cent, a change that would significantly cut its holdings of US Treasuries while increasing exposure to other forms of fixed-income debt.
The proposal was set out in a letter signed by Norges Bank governor Ida Wolden Bache and NBIM chief executive Nicolai Tangen. It would shift about $80 billion (€71.2 billion) out of US Treasuries, of which the fund held roughly $215 billion (€191.4 billion) at the end of June, according to Reuters calculations.
Under the plan, US government bonds would fall from 34.1 per cent of the bond index to 21.9 per cent, while US non-government debt, including mortgage-backed securities, would rise from 16.2 per cent to 27.6 per cent. Euro area government debt would slip from 16.8 per cent to 14.1 per cent and Japanese government bonds would increase from 4.6 per cent to 7.4 per cent. NBIM said any change would be phased in gradually to limit market impact and transaction costs.
The proposal remains subject to approval by the Norwegian Ministry of Finance, which sets the fund’s investment mandate and is headed by finance minister Jens Stoltenberg.
The fund invests the Norwegian state’s revenues from oil and gas production.
It holds an average stake of about 1.5 per cent of all listed companies globally and is invested in some 7,100 companies, as well as bonds, unlisted real estate and renewable energy infrastructure.
At the end of the quarter, equities comprised 72.1 per cent of the portfolio, fixed income 25.8 per cent, unlisted real estate 1.6 per cent and unlisted renewable energy infrastructure 0.5 per cent.
The European Commission has said it will not drop its opposition to new oil and gas drilling in the Arctic, despite sustained pressure from Norway to abandon it. https://t.co/Udkh4ox3Yd
— Brussels Signal (@brusselssignal) September 21, 2026
