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IPFS News Link • World News

A Norwegian Gold Allocation Would Counter Sovereign Incompetence Risk

• http://www.zerohedge.com, Alexander Grover

NBIM (Norges Bank Investment Management), established in 1990 by the Norwegian Parliament, receiving initial funds in 1996, manages the mandate. Currently, The Fund invests 60% in equities, 35% in Fixed Income (bonds) and 5% in real estate, allocating 39% in Europe, 39% in North America, 18% in Asia and 4% everywhere else. Adjusted for inflation and management overheads, the average annual return between 1998-2014 is 6.3% in USD terms, beating the S&P 500 4.2% annual return (inflation adjusted and reinvesting dividends) during the same period.

Although successful in the past, the current situation, considering energy and the global economy, warrants a critical reassessment of their investment strategies. The Fund needs to perform better now that oil prices are below the necessary $70 per barrel, which balances the budget. Norway started to withdraw from The Fund, shoring up deficits amidst a slowing economy.


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