Norway’s SWF is Heavily Exposed to U.S. Technology Companies and Banks
Posted on 03/28/2019
At December 31, 2018, Norway Government Pension Fund Global had 1,299,103,000,000 NOK (US$ 148,830,000,000) allocated to listed equities in financials, 23.7% of its equity portfolio. Of that amount 524,912,000,000 NOK was tied banks, while 266,309,000,000 NOK was tied to the insurance sector.
With regard to the technology sector, the SWF had 689,838,000,000 (US$ 79,030,500,000) dedicated to technology stocks versus 320,756,000,000 NOK (US$ 36,747,000,000) dedicated to oil & gas stocks.
According to Norges Bank Investment Management, at December 31, 2018, the financials sector for equity investments had a 23.7% weight of total equities. This sector contributed 2.9% of the absolute volatility contribution out of 11.6% for equities. Technology contributed 1.8% of the absolute volatility contribution for equities, while oil and gas contributed 0.7%.
This distills down to the returns of Norway’s GPFG are heavily influenced to the performance of the U.S. technology industry and banking sectors.
Norway Government Pension Fund Global – Top Exposures – December 31, 2018
| Ranks | Company Name | Area | Equities (Millions NOK) | Bonds (Millions NOK) | Total (Millions NOK) | Total USD |
|---|---|---|---|---|---|---|
| 1 | Apple Inc | Technology | 62,740 | 7,176 | 69,916 | 8,009,850,000 |
| 2 | Microsoft Corp | Technology | 64,715 | 1,853 | 66,568 | 7,626,290,000 |
| 3 | Alphabet Inc (formerly Google) | Technology | 57,634 | 792 | 58,426 | 6,693,510,000 |
| 4 | Amazon.com Inc | E-Commerce | 54,771 | 2,985 | 57,756 | 6,616,750,000 |
| 5 | Nestle SA | Consumer Goods | 53,914 | 2,291 | 56,205 | 6,439,060,000 |
| 6 | Royal Dutch Shell Plc | Oil and Gas | 51,274 | 1,627 | 52,901 | 6,060,540,000 |
| 7 | Novartis AG | Pharmaceuticals | 39,494 | 3,505 | 42,999 | |
| 8 | Roche Holding AG | Pharmaceuticals | 39,573 | 1,968 | 41,541 | |
| 9 | Berkshire Hathaway Inc | Financials | 33,423 | 4,936 | 38,359 | |
| 10 | JPMorgan & Chase Co. | Financials | 24,913 | 12,972 | 37,885 | |
| 11 | Bank of America Corporation | Financials | 22,345 | 13,726 | 36,071 | |
| 12 | HSBC Holdings Plc | Financials | 27,020 | 8,853 | 35,873 | |
| 13 | Canada Mortgage and Housing Corporation | 31,785 | 31,785 | |||
| 14 | Johnson & Johnson | Healthcare | 29,184 | 2,183 | 31,367 | |
| 15 | BP Plc | Oil and Gas | 25,368 | 3,462 | 28,830 | |
| 16 | AT&T Inc. | Telecommunications | 17,389 | 11,424 | 28,813 | |
| 17 | Kreditanstalt fur Wiederaufbau | Government-related | 27,475 | 27,475 | ||
| 18 | Verizon Communications Inc | Telecommunications | 20,331 | 6,932 | 27,263 | |
| 19 | Banco Santander SA | Financials | 16,839 | 10,341 | 27,180 | |
| 20 | Tencent Holdings Ltd. | Technology | 26,340 | 788 | 27,128 | |
| 21 | Facebook Inc | Technology | 27,059 | 27,059 | 3,099,980,000 | |
| 22 | TOTAL SA | Oil and Gas | 24,780 | 1,876 | 26,656 | |
| 23 | Wells Fargo & Co | Financials | 16,790 | 8,732 | 25,522 |
Source: Norges Bank