OSLO, Oct 22 (Reuters) – Norway’s US$2.3 trillion sovereign wealth fund said it had adopted a “slightly cautious” stance with respect to stock markets and to some of the largest technology-sector companies, after reporting, on Thursday, a loss of 278 billion kroner (US$29.7 billion) in the third quarter.
Investing the Norwegian state’s revenues from oil and gas production, the fund holds, on average, 1.5% of all companies listed on stock exchanges globally, which makes it the world’s largest single investor.
“We have been transparent in stating that we have been somewhat cautious about the stock market as a whole and somewhat cautious regarding some of the largest technology companies,” said Executive Vice President Trond Grande to Reuters after the results release. “Overall, these are only small underweights.”
The fund is to follow a benchmark index defined by the Ministry of Finance, with the stocks tracked by the FTSE Global All Cap index, which means it has a small margin to deviate from the index and hold underweights or overweight in certain stocks.
The fund’s return was 0.18 percentage points below the benchmark in the quarter.
Grande said the fund had maintained a slight underweight in some technology stocks for “quite a long time” and has no plans, for now, to change that. The technology sector as a whole accounted for 23% of the fund’s total holdings as of June 30, according to fund data.
“We are satisfied with how the fund is structured at the moment… but this is something we review constantly. So nothing is set in stone,” he said.
Generally, there was considerable “volatility” in the AI stock ecosystem, ranging from model labs and data centers to energy providers and chip manufacturers, he said.
“If there were a negative reaction or an accident that somehow hampers the technology’s penetration, that would certainly hurt the stock market,” he said, adding that he would not describe the risk to the markets as systemic.
In the third quarter, the fund posted a negative return of 0.5% on its global investments due to rising interest rates, which affected its fixed-income portfolio, accounting for 25.8% of its total holdings in the period.
In total, the fund is invested in about 7,100 companies, in addition to bonds, real estate, and renewable energy projects.
