“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.
