Norway’s Government Pension Fund, regularly referred to as the world’s largest sovereign wealth fund, reported a negative return of 0.6% in the first quarter of 2025, equating to a loss of 415 billion kroner ( US$40 billion ), according to Norges Bank Investment Management ( NBIM ).

In its latest report, the fund says it ended March with a total value of 18,526 billion kroner, or US$1.78 trillion. Despite modest gains across fixed income ( up 1.6% ), unlisted real estate ( 2.4% ), and unlisted renewable energy infrastructure ( 1.2% ), the drag from public equities, which make up about 70% of the portfolio, proved significant. As a result, its equity investments fell by 1.6%, weighed down largely by underperformance in the technology sector, says NBIM chief executive Nicolai Tangen.

As a potential safe-haven play, the kroner’s appreciation against major currencies compounded the fund’s decline, reducing the portfolio’s value by an additional 879 billion kroner. However, Norwegian government inflows softened the blow slightly, adding 78 billion kroner.

NBIM’s diversified approach offers a global footprint, with 14.2% of equity exposure linked to Asia. While the MSCI All Country Asia Index delivered a positive 1.29% return over the quarter, outperforming North America’s broader declines, this regional strength was not sufficient to offset the overall equity losses, given the fund’s heavier weighting towards the tech-heavy US markets.

Tangen says despite volatile conditions, the fund's return slightly outpaced its benchmark by 0.16 percentage points, demonstrating some resilience in a turbulent global environment. He cautions, however, that market uncertainty will remain at elevated levels moving into the second quarter.

With Asia’s equity markets showing relative resilience this quarter, global allocators are increasingly considering diversified exposures towards the region amid the ongoing volatility in Western markets.