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Norway’s $945 Billion Wealth Fund Set to Buy Stocks Due to Rout

Mikael Holter

(Bloomberg) --

Norway’s $945 billion sovereign wealth fund is set to buy equities after the market rout decimated its stock holdings.

The fund’s equity portfolio has dropped 23% so far this year, meaning it accounts for slightly more than 65% of total investments, far below the 70% target in its mandate.

“The fund is in a situation that will likely trigger a so-called rebalancing rule,” Chief Executive Officer Yngve Slyngstad said at a press conference in Oslo. “That means that we will, at some point in the future, likely start buying stocks in the global equity markets.”

The fund’s mandate requires it to notify the Finance Ministry when its stock portfolio deviates by more than 2 percentage points from the 70% target. The government then has broad leeway to decide when the actual rebalancing starts and what period its stretches over.

Slyngstad declined to say whether the fund had already started to adjust its portfolio.

The fund as a whole has lost 16% this year as of Wednesday, the fund said in presentation material linked to its annual report on return and risk. The fund, which Norway invests in stocks, bonds and real estate abroad, was valued at 10.1 trillion kroner ($945 billion), a slightly higher value in the local currency than at the end of 2019 after a sell-off in the krone.

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