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Norway launches review of oil fund equity allocation

“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.

 

Part of the Bonhill Group.