Norway's oil fund has reduced its bond holdings to their lowest level to date as the world's largest sovereign wealth fund signals its discomfort with the effects of western central banks'' money printing. The fund held just 36.7 per cent of its $726bn assets in bonds at the end of the first quarter, the lowest proportion since it first received money in 1996. Its equity holdings were close to a record high, accounting for 62.4 per cent of the total. Yngve Slyngstad, the CEO of Norges Bank Investment Management, told the Financial Times that the fund could take several courses of action to reduce the risk of a sharp fall in bond prices, including buying property and diversifying into new currencies. It has also reduced the average duration of its bond holdings from about six to five years.
Source. Richard Milne: "Norwegian wealth fund cuts bond portfolio", Financial Times, 27-28 April 2013.
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