tutor2u | Where next for Norway's sovereign wealth fund?

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Where next for Norway's sovereign wealth fund?

Geoff Riley

21st November 2017

The world's biggest sovereign wealth fund (worth in excess of $1trillion) has proposed dropping its investments in oil and gas stocks.

The Norwegian fund officially known as Government Pension Fund Global (GPFG) is run by the Norwegian Central Bank and is designed - in large part - to help diversify the risks facing the Norwegian economy over the longer term and in particular, dependency on revenues from oil and gas exploration, production and refining. 

It comes as something of a surprise that 6% of the fund is currently held in oil and gas equities! But there is no denying the significance of the fund in global stock markets and many analysts will be looking carefully to see in which direction the fund moves when reallocating their portfolio.

Is this a lead indicator of a tipping point for investment in conventional energy supplies?

Sovereign wealth funds are state-owned (the UK does not have one and perhaps we should have created one when North Sea production was at a peak). The invest in a broad array of financial assets including stocks, bonds, real estate and even investments in globally-traded precious metals.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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