Norway's Sovereign Wealth Fund Reports $29.7 Billion Loss Amid Divestments

Norway's sovereign wealth fund, managing $2.3 trillion in assets, announced a significant loss of approximately $29.7 billion. The fund's management expressed caution regarding the stock market, particularly large technology companies. The fund, which invests the nation's oil and gas revenues and holds stakes in about 7,100 companies globally, has faced scrutiny in Israel for its investment decisions. In December 2024, the fund divested its holdings in Bezeq, citing the company's communication services to West Bank settlements. Further divestments followed in May 2025, with Reuters reporting the sale of shares in Paz due to its fuel supply infrastructure for settlements. A Norwegian newspaper revealed in August 2025 that the fund had acquired a stake in Engines House ofמשמש, which provides services to the IDF, including fighter jet maintenance.

The Norwegian government initiated a review of the fund's investment portfolio to ensure Israeli companies contributing to the occupation or the war in Gaza were excluded. Consequently, the fund announced the sale of its stakes in 11 out of 61 Israeli companies and terminated agreements with external asset managers handling its Israeli investments. While only Engines House ofמשמש was initially named, Norwegian financial newspaper E24 reported the sale of holdings in 17 companies, including El Al, Dledi Rechev, and Rami Levy, since late June. The fund later announced the removal of six additional companies from its portfolio.

Norway's Finance Minister, Jens Stoltenberg, stated that while the policy is not to sell all Israeli holdings, the fund must adhere to its ethical guidelines. In late August 2025, the fund expanded its divestment to include major Israeli banks, selling shares in Bank Hapoalim, Bank Leumi, Mizrahi Tefahot, International Bank, and FIBI for approximately 2 billion shekels. The fund cited ethical considerations, with its ethics council noting the banks' direct support for settlement construction through financial services. The combined holding in these banks was valued at $661 million as of July. The fund also exited its investment in Caterpillar, the manufacturer of D9 bulldozers, a move that drew sharp criticism from the U.S. State Department, which expressed concern over what it deemed baseless accusations against the company and the Israeli government. The Norwegian Prime Minister responded that the fund operates independently.

Despite the divestments, the fund's third-quarter return was negative 0.5% on its global investments, attributed to rising interest rates impacting its bond portfolio. Deputy CEO Trond Grande told Reuters that the fund is slightly cautious about the stock market and some large tech names, maintaining a slight underweight in certain tech stocks without immediate plans for change. The technology sector constituted 23% of the fund's holdings as of June 30.