Norway's $1.4 trillion sovereign wealth fund, the world's largest, reported a loss of $34 billion in the third quarter due to drops in the value of equities and bonds. The fund's return on investment was -2.1%, with equities, fixed income, and real estate assets all experiencing losses. The decline may be attributed to rising interest rates. The fund expressed concern about the concentration of growth in a few large U.S. tech companies. It also has minimal exposure to Israel and is monitoring the situation in the region.
The average workplace retirement plan balance for American investors fell from $144,280 to $111,210 in 2022, as the stock market experienced significant losses. The median plan balance dropped to $23,818, the lowest in a decade, with a median annual return of -14.7%. The participation rate in workplace savings plans slightly decreased, while the average contribution rate slipped. However, most workers stayed the course and did not make drastic changes to their investments. The percentage of workers eligible for workplace plans with fewer than two years of service increased, indicating the effectiveness of automatic enrollment plans. Despite the challenges, markets have shown improvement in 2023, with the S&P 500 index up over 14% by the end of June.
Alecta, Sweden's largest pension fund, is facing losses of almost $2 billion due to a failed investment strategy that made it one of the biggest shareholders in two collapsed US banks and another that's been caught up in the crisis. The losses have become clearer after the private pension group sold all of its First Republic Bank stake at a loss of 7.5 billion kronor ($728 million). The soured bets at Alecta have sparked an outcry in the Nordic country, as well as an internal investigation into its investment processes and a summons from the FSA.
