Norway is to boost the proportion of shares it buys for the government fund which invests the nation’s vast oil wealth on behalf of Norway’s four and a half million people. Currently a maximum of 40% of the fund is invested in the story markets. That will be increased to 60% with government bonds being sold off.
Norway’s central bank has been pushing the government to do this in order to boost returns. Responding to concerns about the dangers of a stock market down turn the finance minister said: “We believe this represents an appropriate trade-off between expected risk and return.” He added that the fund’s managers have learned by experience how to handle volatility in returns.
The decision to increase the percentage of shares will fuel a long running debate in Norway about the acceptable level of risk and whether enough of the money is being used it improve the living standards of Norwegians. The fund is currently worth over 230 billion euros.