Norway's Government Pension Fund Global, Oslo, returned -6.1% in 2018, as weak equity markets reduced the sovereign wealth fund's assets to 8.25 trillion Norwegian kroner ($945 billion).
The return equated to a 485 billion kroner loss for the year. That fund gained 13.6% in 2017.
The annualized net return for the five years ended Dec. 31 was 4.75% and 8.3% over the 10-year period.
An update from world's largest sovereign wealth fund showed that equities, which accounted for 66.3% of the fund's allocation, returned -9.5% for the year, compared with 19.4% for the previous year. The smallest losses were from North American stocks, which returned -3.7%. U.S. stocks, the sovereign wealth fund's single largest market allocation at 38.8%, lost 5.4%. European stocks lost 13.5%; U.K. equity lost 8.9%; and Asia and Oceania equity returned a combined -13.4%.
A fixed-income allocation of 30.7% added 0.6% for the year vs. a 3.3% gain for 2017.
The sovereign wealth fund's 3% real estate allocation returned 7.5% for the year, the same as in 2017.
"Although performance was weak in 2018, the long-term return has been good and higher than the return on the benchmark index," said Oystein Olsen, chairman of the executive board of Norges Bank, the manager of the fund, in a news release.
"The fund bought equities for 185 billion kroner in fourth quarter 2018. Most of this was bought in November and December," said Yngve Slyngstad, CEO of Norges Bank Investment Management, in the release.