The Government Pension Global Fund (the oil fund) should invest more in American equities and less in European than it does today, Norges Bank believes.
This is stated in a letter Norges Bank has sent to the government, writes E24.
The return on equities in North America has been higher than in Europe in recent years. Last year, the oil fund’s European equities fell by 13.5 %, while North American equities fell just 3.7 %.
The Bank’s advice is that the geographical distribution should be further adjusted in the direction of free float-adjusted market weights by increasing the distribution to equities in North America and reducing the distribution to equities in developed markets in Europe, the letter states.
At the end of the second quarter, the shareholding in North America was 42 % and Europe 33 %. In addition, there are Asia/Oceania and emerging markets.
Finance Minister Siv Jensen says it is important that the framework for the fund’s investments is good and up to date. In November last year, Norges Bank was asked to provide input for the geographical distribution of shares.
We will consider by spring 2020 whether there is a need to make adjustments to the index. The analyses from the bank are one of the suggestions we get for this work, says Jensen.
© NTB Scanpix / #Norway Today
