Aug. 18 (UPI) -- The world's largest sovereign wealth fund on Tuesday reported a $21 billion loss over the first six months of 2020, due to "major fluctuations in the equity market."
Norges Bank Investment Management said Norway's Government Pension Fund declined nearly 7% in value over the period.
The report said the loss was dramatic because equity investments, which have been heavily affected by the COVID-19 pandemic, make up nearly 70% of the fund. The fund's total value is $1.18 trillion.
"The year began optimistically, thanks partly to expectations of healthy growth in the real economy," the report said. "The bull market came to an abrupt end as the coronavirus began to spread globally and countries around the world took drastic action to limit contagion.
"Financial markets were hit by a series of liquidity shocks due to substantial demand for cash both in the real economy and among investors. The collapse in share prices was counteracted by a massive monetary and fiscal response."
Norges said economic support packages by various governments have helped relax some economic fears, however.
"Together with a gradual relaxation of the lockdown measures in many developed markets, this made investors more optimistic again," it states.
The Government Pension Fund was created to protect Norway from harmful fluctuations in its oil sector, which accounts for much of the nation's economic productivity.
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