For the first time in five years, Norway’s wealth fund has failed to its benchmark due to losses in the real estate market.
The fund, which totals $1.6 trillion, failed to meet its benchmark by 18 basis points, with the first miss recorded in 2018.
The fund was originally created in the 90s to help manage the country’s oil and gas revenues abroad.
Speaking with reports in Oslo, Chief Executive Officer of the Norges Bank Investment Management, Nicolai Tangen, explained, “It’s been a really tough market for real estate generally, and debt levels have been pretty large.”
Even though stock markets rebounded, losses in real estate drove an overall underperformance for last year as property holdings mean that it owns fewer stocks and bonds. This negative relative return drags down outperformance in other markets.