Norway Oil Fund to Invest More in US Stocks, Reduce EU Exposure
Norway's wealth fund to follow 'value creation' with increased bets on US, Canada No..
Norway's wealth fund to follow 'value creation' with increased bets on US, Canada
Norways massive oil fund is planning to invest more heavily in the United States and Canada while cutting back on its investments in Europe, according to a statement made Monday by the Norwegian government.
Officially called the Government Pension Fund Global, the oil-rich nations sovereign wealth fund is one of the worlds largest at $1.15 trillion, and is deliberately spread across markets, countries, and currencies to capture global growth while minimizing risk. The fund is invested in more than 9,000 companies worldwide, including Apple, Microsoft, and Samsung, and holds an average of 1.5 percent of all of the companies listed on global stock exchanges.
According to calculations performed by Reuters and based on government data, the change of course toward North American companies could lead to the investment of an extra $50 billion in U.S. stocks.
“The changes we are proposing will ensure the investments better represent the distribution of value creation in listed companies globally,” said Norwegian Minister of Finance, Jan Tore Sanner, in a statement.
“The recent market turbulence demonstrates that we need to be prepared for sudden and large movements in the financial markets. We have a long-term perspective and a robust investment strategy. This will serve us well in the long run,” Sanner said.
In the past, the fund has tended to invest more heavily in those countries Norway trades with most, which led to higher weightings for European companies. The fund will retain its focus on European stocks, while tempering this by moving some investments to North American firms.
Safeguarding the Norwegian Economy
One of the largest offshore oilfields in the world was discovered in the North Sea off the coast of Norway in 1969. Over the next decade, and especially after the oil shocks of the 1970s, the Nordic nation decided to create an oil and gas revenue fund to provide for the future needs of Norwegian citizens.