Norway launches review of oil fund equity allocation

The Norwegian government has launched a review of the asset allocation of the national oil fund ‘Statens pensjonsfond utland’. The purpose of the review is especially to determine whether its current exposure of 60% to equities should be increased.

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PA Europe

“The relative exposure to equities has the highest impact on the expected return and the long-term risk profile of the fund,” says Norway’s finance minister Siv Jensen. 

The purpose of the review, which will be concluded by October, is to draw up a risk return profile for all equity asset classes, “and can result in changes in the equity allocation,” according to a press release published on Friday.

The last time the oil fund changed its allocation to equities was in 2007, when it decided to increase it from 40% to 60%. Bonds made up the remaining 40% of the fund until 2011, when the fund started to replace a small proportion of bonds with real estate. Though the government doesn’t mention it explicitly, an increase in equity exposure is likely to again go at the expense of fixed income.

 

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