Norges Bank Investment Management (NBIM) which manages the world’s largest sovereign wealth fund, said that the fund’s value had declined by 4.9 percent over the period, losing a staggering 273 billion Norwegian kroner ($32 billion). 

 

It said that the loss represented the third weakest result in kroner since the fund was launched in 1967.

 

“The negative return on equity investments was driven by the slowdown in the global economy and the decline in global equity markets, especially the Chinese market,” Yngve Slyngstad, NBIM’s chief executive, said in a statement. 

 

“We have to expect fluctuations in the value of the fund when there are large movements in the market. The fund has a long-term horizon, however, and is in a good position to ride out short-term market volatility.”

 

The fund lost 4.9 billion Norwegian kroner on its Volkswagen shares, following the carmaker's emissions scandal. Its second worst performing stock was Glencore, which has seen its shares plummet as investors worry about its ability to service its heavy debt. 

 

Overall, the value of the fund’s equity investments fell 8.6 percent over the period.

 

Slyngstad said that the sustained low oil price could mean that the fund receives no income from Norway’s national oil revenues for the rest of the year. 

 

“It is quite likely that you will see a fourth quarter without inflows,” he said in a press conference. “But it’s still a situation we are comfortable with . . . There isn’t any practical issue from the management of the fund with regards to a lower inflow.”