Norges Bank, the world's largest sovereign wealth fund, is considering reducing its investments in Europe and increasing them in North America, according to a recommendation by the two-billion-euro oil fund managers, says “Financial Times ”this Tuesday.
The fund, controlled by Norway's central bank, is one of the world's largest equity investors and averages 1.5% of all listed companies worldwide. Europe now represents 34% of its stock benchmark, compared with 40% in North America.
“We are of the opinion, however, that geographical distribution should be further adjusted to float-adjusted market heavyweights, increasing the weight of equities in North America and reducing the weight of equities in developed European markets. The gap to the market's heavyweights will be smaller than today, ”said Norway's central bank.
The Scandinavian government will consider the possibility, but the decision is not to be announced until spring 2020 when it publishes an annual report on the fund, which will then be voted by parliament.
Norway last changed the fund's regional reserve in 2012 when it previously reduced European equities at the height of the eurozone government debt crisis. At the time, European stocks accounted for 50% of the total, while 35% were in North America.