The world’s largest sovereign wealth fund lost NOK636 billion ($68 billion) in investment returns in the first quarter, driven by the equity slide among large US technology companies. The S&P 500 posted its deepest quarterly decline since 2022. The fund marginally outperformed its benchmark.

Norges Bank Investment Management (NBIM), which manages Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund at approximately $2.2 trillion, reported a negative return of 1.9% for the first quarter of 2026 on Thursday, its first quarterly loss in four quarters.

The fund lost NOK636 billion (approximately $68 billion) in investment returns during the January–March period. It beat its benchmark index by 0.01 percentage point.

The total reported decline in fund value was NOK1.27 trillion ($137 billion), a larger figure that includes the effect of currency movements: as the Norwegian krone strengthened against major currencies during the quarter, the value of the fund’s predominantly foreign-currency holdings declined further in krone terms when translated back.

“The result reflects a quarter with challenging market conditions,” deputy CEO Trond Grande said in a statement. “We saw limited impact on fixed income and real estate, but it was the decline in equities, especially among large US technology companies, that determined the outcome.”

The 💜 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol’ founder Boris, and some questionable AI art. It’s free, every week, in your inbox. Sign up now!

The fund holds approximately half its assets in US markets and has major positions in technology companies including Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla.

US tech megacaps sold off sharply during Q1 2026, leaving the S&P 500 with its deepest quarterly decline since 2022, a move driven primarily by the geopolitical shock of the Iran war.

The US and Israel launched coordinated strikes against Iran in late February 2026, triggering a sustained market selloff that hit high-multiple growth stocks hardest.

Technology companies, which trade at elevated price-to-earnings multiples and are sensitive to risk-off sentiment, rising rates, and uncertainty about the economic outlook — bore the brunt.

Although markets have since partially recovered, the Q1 close locked in losses for the period. The Norwegian Ministry of Finance, in its 2026 white paper to the Storting, noted that the Iran war had pushed oil prices up while simultaneously pushing the value of the fund down, an unusual combination for Norway, which is both a major oil producer and a major equity investor.

Norway’s oil revenues have historically supported the fund’s growth, but the fund is now so large that its performance is more sensitive to global equity markets than to the oil price.

The quarter marks the second time in consecutive years that large US technology companies have been the primary driver of a quarterly loss for the fund. In Q1 2025, the fund also posted a loss driven by the tech sector, that time triggered by the emergence of DeepSeek, which wiped $2.7 trillion from US tech megacaps in a matter of weeks.

The pattern underscores the structural concentration risk inherent in the fund’s equity portfolio: as the largest single shareholder in many of the world’s most valuable technology companies, NBIM’s quarterly performance is increasingly correlated with the performance of a small number of US tech stocks.

The fund itself holds approximately 1.5% of all listed equities globally, making diversification within equity markets a genuine constraint rather than a simple choice.

Fixed income and real estate provided some buffer. NBIM’s fixed income portfolio and unlisted real estate holdings saw limited negative impact, consistent with the Q1 pattern in which the selloff was equity-specific and did not trigger a broader risk-off across credit markets.

The fund ended Q1 with a value of approximately $2.1–2.2 trillion depending on the dollar/krone exchange rate applied; the dollar-denominated headline of “$2.2 trillion” reflects the fund’s size at some recent prior date rather than its Q1 closing value after the loss.