Norway's Oil Fund Reaches $1 Trillion

offshore

By MarEx 2017-09-22 19:47:34

On Tuesday 19, the value of Norway's Government Pension Fund hit $1,000,000,000,000 or $1 trillion for the first time. The Fund is based on revenue raised from the nation's oil industry and is designed as savings for future generations – when the oil runs out.

A strengthening of the world’s major currencies against the U.S. dollar, combined with strong equity markets, have rapidly increased the U.S. dollar value of the fund this year.

"I don’t think anyone expected the fund to ever reach one trillion dollars when the first transfer of oil revenue was made in May 1996. Reaching one trillion dollars is a milestone, and the growth in the fund’s market value has been stunning", says Yngve Slyngstad, Chief Executive Officer of Norges Bank Investment Management, the firm that manages the fund. 

The fund has invested in around 9,000 companies in 77 countries around the world. In value, the fund owns 1.3 percent of all listed companies worldwide and is invested in unlisted real estate in cities like Paris, London and New York. The goal is to have well diversified investments that distribute risk and generate the highest possible return. As at June 30, 2017, the fund's asset allocation was 65.1 percent equities, 32.4 percent fixed income and 2.5 percent unlisted real estate.

The fund's largest equity investments are in Apple, Nestle, Alphabet, Royal Dutch Shell, Microsoft, Novartis and Roche.