World's largest sovereign fund trims Bangladesh exposure as Norway's 'Oil Fund' investment hits six-year low

Norway's Government Pension Fund Global, the world's largest sovereign wealth fund, has significantly scaled back its exposure to the Bangladeshi capital market.

During the first half of 2026, the fund's investment in the country dropped by 18%, equivalent to a reduction of $21.25 million.

According to the half-yearly report released today (12 August) by Norges Bank Investment Management (NBIM), which manages the fund, the total value of its Bangladeshi portfolio stood at $95.87 million as of June 2026.

This decline marks a continued retreat from a peak valuation of $248.35 million recorded in 2020. Over the last six years, the fund – popularly known as the "Oil Fund" due to its origins in managing Norway's petroleum revenues – has steadily reduced its footprint in the Dhaka bourse. From $211.89 million in 2021, the investment fell to $155.04 million in 2022 and further down to $117.12 million by the end of 2025, before hitting its current six-year low.

The reduction in exposure was broad-based, affecting almost all of the fund's major holdings in Bangladesh's blue-chip companies. 

In BRAC Bank, its largest local holding, NBIM reduced its stake from 4.42% in 2025 to 3.66% by June 2026. 

Similar trends were observed in other market leaders: its ownership in Square Pharmaceuticals dropped from 1.93% to 1.21%, while in City Bank, it fell from 3.55% to 2.95%. 

Even telecommunications giant Grameenphone and multinational Marico Bangladesh saw their shares held by the Norwegian fund dwindle significantly, with Grameenphone's holding plunging to a mere 0.25%.

Market analysts suggest that this divestment is not necessarily a reflection of the fundamental performance of the individual companies, many of which remain highly profitable. Instead, the retreat is attributed to systemic and structural challenges within the Bangladeshi economy. 

A senior analyst at Brummer & Partners Bangladesh, the firm that manages the fund's local portfolio, explained that the slowdown since 2020 is tied to a "perfect storm" of adverse factors. These include the long-term aftershocks of the Covid-19 pandemic, the controversial floor price mechanism that froze the market for extended periods, foreign exchange volatility, and a general climate of economic and geopolitical uncertainty caused by the Middle-east and Russia- Ukraine war.

The analyst noted that while the fund is a long-term equity investor, its risk assessment protocols mandate a reduction in exposure when macroeconomic indicators are unfavorable. Despite the sell-off, the fact that Norway's sovereign wealth fund continues to maintain nearly $96 million in Bangladesh suggests a lingering preference for the country's fundamentally strong and well-governed market leaders.

Analysts believe that if the government can stabilise the exchange rate and ensure a more transparent, market-driven environment, global giants like NBIM may eventually return with fresh capital.

The cautious stance in Bangladesh stands in stark contrast to the fund's overall global performance. Globally, the Government Pension Fund Global – which manages a staggering $2.3 trillion and holds stakes in over 10,000 companies across 67 countries – returned 9.4% in the first half of 2026. This performance outperformed its own benchmark index by 0.22 percentage points. The fund's total value grew by 1,416 billion kroner during the period, largely driven by its massive 72.1% allocation in global equities.