🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Norway's wealth fund gives reasons for energy shares decision

Published 11/28/2017, 04:33 AM
© Reuters.  Norway's wealth fund gives reasons for energy shares decision
EQNR
-

OSLO (Reuters) - Norway's $1 trillion sovereign wealth fund said it found no significant differences in expected return for oil and gas shares and the market as it set out more details of its plans to cut investments in energy companies.

The world's largest sovereign wealth fund this month proposed dropping oil and gas shares from its benchmark index, sending energy stocks lower.

"It might be beneficial for an investor that already has substantial oil price exposure outside their financial portfolio, not to add to this exposure by investing in oil and gas stocks in their financial portfolio," the fund said in a discussion note.

If adopted by parliament, the fund would over time divest billions of dollars from oil and gas stocks, which now represent 6 percent -- or around $37 billion -- of its benchmark equity index.

The aim is to make the fund less vulnerable to a permanent drop in oil prices when it is increasing its exposure to equities to 70 percent of total value from 60 percent earlier.

In addition to its holdings via the fund, Norway has its own exposure to oil and gas through untapped offshore hydrocarbon reserves, as well as its 67 percent stake in the national oil company, Statoil (OL:STL).

The Statoil stake is held directly by the government and will not be affected by any sale by the fund, which is managed separately.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.