Norway’s pension fund, the world’s largest sovereign fund has lost 73 billion kroner or approximately $8.8 billion in the second quarter. That’s a loss of 0.9% and the country’s first pension fund loss in three years.
The pension fund was hurt by low-interest rates, a weak bond market, and falling returns from U.S. stocks.
Officials in Norway place most of the countries oil revenues into the fund to help pay the pension of government workers and to pay worker expenses.
The fund is heavily invested in U.S. and European markets which were both hit by the Greek turmoil and uncertainty surrounding the Fed’s decision to raise interest rates.
According to the fund, negative returns in U.S. investments have contributed most heavily to the downturn. The fund lost 3.4% of its $55 billion investment in U.S. treasuries and 1.4% on its U.S. stock holdings.
It’s believed the Norwegian fund owns 1% of the world’s stocks, making it one of the largest investors in the world. The fund has a market valuation of more than $863 billion. Nearly 20% of the fund’s money is invested in U.S. stocks.
The fund was also hit by its investment in Chinese mining although it gained 2% thanks to smart real estate investments.
The fund has posted a 5.8% annual return between 1998 to 2014.