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.