Oil Fund may invest more in stocks

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Norway’s huge sovereign wealth fund, known as the Oil Fund, wants to start investing more of the oil revenues it receives in the stock market, to boost returns. Norway’s central bank, which is responsible for the fund, is seeking permission to do so from the finance ministry.

The Oil Fund currently invests 60 percent of its assets in stocks, with the rest placed in bonds, commercial paper and real estate. The higher risk of stock market investments carries a higher reward, with the potential to offset low interest rates with gains from share appreciation and dividends.

Norges Bank is proposing that 75 percent of the Oil Fund’s assets be invested in global stock markets, where Norway has become a major and sought-after investor. The increase is expected to boost annual returns by around NOK 35 billion, but the overall value of the fund would swing much more than it does now. Politicians ultimately charged with investing Norway’s oil fortunes for future generations would have to be prepared for that, reported newspaper Aftenposten.

newsinenglish.no staff

Comments

  1. inquisitor says:

    Could be very risky and potentially disastrous. Norway needs to invest in things that also results in actual tangible ownership of resources and assets…not paper and debt instruments.
    Here is my prediction on the future of the financial situation in the next two or three years for America, but let’s see what happens.

    The inflated stock market will take a dive similar to the tech dive and devalue by 50%.
    Oil to drop to $20 and gold down to $300-$500
    American residential real estate already half its value compared to 2005 is going to take another huge hit, but now along with the commercial real estate market as well.

    The only two things I would trust with the future of the American economy in the next two to three years is the value and confidence of the dollar, but in cash on-hand in your physical possession or in an account or fund where no one can keep you from getting access to your dollars should there be a financial crisis or a run on the banks.
    And actual US treasuries, which means not any instruments which are presented to resemble or are disguised as treasuries.

    Looking at Deutsche bank problems and the cracking up of the EU, I can’t say Europe looks to be very bright in its prospects either.

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