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The World's Biggest Sovereign Wealth Fund Is Now Worth $1 Trillion

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The World's Biggest Sovereign Wealth Fund Is Now Worth $1 Trillion

The world's largest sovereign wealth fund is now valued at more than $1 trillion. Norway's sovereign wealth fund held $900 billion in assets as of March 2017, and it has gained $100 billion since then, Bloomberg reported.

On Tuesday at 2:01 local time, the country's sovereign wealth fund was valued at $1 trillion. What's most notable in this situation is that a white paper in April 2011 estimated the fund wouldn't reach the $1 trillion mark until the end of 2019.

A strong stock market rally throughout the world coupled with the strengthening of global currencies versus the U.S. dollar helped the fund achieve this milestone.

However, there are some problems with managing a trillion dollar portfolio, Bloomberg noted. Finding new areas to allocate capital, such as infrastructure investments, could "deliver a blip" on total returns. Meanwhile, the fun is in the process of undoing some of its global bond diversification by investing in just three currencies — the dollar, euro and pound — rather than its current 23 currencies.

Also, have delivering strong gains throughout 2017 the fund could find it difficult to continue its performance. Norway's central bank governor Oystein Olsen has already cautioned that a decline in oil prices implies the fund has already passed its peak.

Finally, the fund itself owns a staggering 1.3 percent of global stocks and the country's fund managers and the fund's CEO Yngve Slyngstad himself stated that global political risks and fundamental issues with the worldwide economy could impact stocks worldwide.

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Posted-In: Norway Norway Sovereign Wealth FundNews Markets Media Best of Benzinga

 

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