Norway’s oil fund responded by investing about 150 billion kroner in emerging market sovereign debt last year, boosting the share of emerging market government bonds to 10.2% of fixed-income holdings from 0.4% a year earlier. Holdings in Mexican government debt grew by 14% to 22.6 billion kroner in the fourth quarter to become the fund’s ninth-biggest bond holding. It also made its first purchases of government bonds from Turkey, Russia and Taiwan.
The fund’s holdings in French government debt slumped 25%, while its investments in U.K. sovereign debt fell 13%. The fund is also underweight its benchmark index in yen-denominated securities, Bunny Nooryani, a spokeswoman for the investor, said by phone.
Slyngstad said last week the change in strategy in 2012 was “the most substantial” since the increase in the fund’s equity allocation to 60% from 2007 to 2009.
The fund is undergoing a shift in strategy to capture more global growth to safeguard the nation’s oil wealth. It said last week it posted a return of 13.4% in 2012, its second-best year ever.
The fund in 2012 cut its European holdings to 48% of total investments from 53% a year earlier, and has come “halfway” to its 40% target, Slyngstad said.
“The big shift in the strategy probably paid off so 2012 became a good year,” Olav Chen, a senior portfolio manager at Storebrand Asset Management in Oslo, who oversees about $8 billion, said in an e-mailed reply to questions.