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World’s Biggest Wealth Fund Slows Emerging Market Investment – Bloomberg 08-21-14

Salient to Investors:

Yngve Slyngstad at Norges Bank Investment Management, Norway’s sovereign wealth fund, said:

  • They are gradually picking up some new markets but at a less rapid pace than at the beginning of 2014. At the end of June, 9.9% of the fund’s stocks and 13.4% of its bonds were in emerging markets.
  • They neither buys nor sells markets that exhibit the kind of turbulence and geopolitical risk that Russia is enduring.
  • They expanded into stocks in 1998, emerging markets in 2000, and real estate in 2011.
  • Invest in countries roughly in proportion to the size of the underlying economy. Will move to correct being hugely under-invested in China, currently 2.4% of all equities and largest emerging market position,
  • They will reduce the share of European stocks to 40% from the current 46%.

Harald Magnus Andreassen at Swedbank said growth markets are prone to more volatile developments because people get too fascinated with the growth story and forget the long-term balance in the market that does not yield that high a return on those investments.

Read the full article at  http://www.bloomberg.com/news/2014-08-20/world-s-biggest-wealth-fund-slows-investment-in-emerging-markets.html

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