THINGS TO know
Overflowing fund
Norway’s sovereign wealth fund, the world’s largest of its kind, has hit a milestone value of US$1 trillion, beating all expectations since its creation over 20 years ago.
Norway’s sovereign wealth fund, the world’s largest of its kind, has hit a milestone value of US$1 trillion, beating all expectations since its creation over 20 years ago.
The fund, which hit its record value early Tuesday, has been boosted lately by a rise in stock markets and a weaker U.S. dollar, which increases the dollar value of its holdings in other currencies.
Norway first deposited oil and gas profits into the fund in May 1996.
CEO Yngve Slyngstad said nobody at the time expected it to hit the trillion-dollar mark, and the growth is “stunning.”
The fund invests proceeds from the country’s oil and gas industry to secure pensions for future generations in Norway, a country of 5.3 million people.
Because of its sheer size, the fund does not reinvest all its money in Norway, or it would overheat the economy. Money from the fund is placed worldwide, with about 42 per cent in North America, 36 per cent in Europe and 18 per cent in Asia.
Of the total, 65 per cent is in stocks — including a Us$7.4billion stake in Apple and $5.5 billion in Alphabet.
The fund puts 32 per cent of its money in fixed-income financial instruments such as bonds, and 2.5 per cent in unlisted real estate, according to data from the company that handles the fund, the Norges Bank Investment Management.
While there are bigger investment funds around the world, Norway’s is the biggest sovereign wealth fund, specifically meant to invest the wealth of a country’s citizens.