OSLO: Norway’s $1 trillion sovereign wealth fund should shift billions in investments from European stock markets and instead invest more in the United States and other North American markets to seek higher returns, the fund’s manager recommended on Tuesday.
The world’s largest sovereign wealth fund has historically given higher weighting to European stocks, focusing on countries that Norway does the most trade with, and a lower weighting to those of North America.
But the Norwegian central bank, which manages the Government Pension Fund Global, said this was no longer necessary, and it wanted the fund’s portfolio to better reflect the available pool of investments.
“We can all see that both return and the common measure of risk has been better in North America in the past years than it has been in the rest of the world,” Egil Matsen, the deputy central bank governor in charge of the fund, said.
He declined to say how much of the value of the fund could potentially shift further. “We are not specific on that, and that is a conscious decision,” he said, stressing that it would be up to the finance ministry, and parliament, to decide whether to take up the central bank’s advice.
If they do, it would mean potentially billions of euros, pounds and other European currencies of investments would shift from Europe to the United States and other North American markets. — Reuters
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