He also said it made a conscious choice not the recommend specific weights since there are a lot of risk factors for the ministry to consider when it decides.
In Norway, there’s a debate on whether the country’s overall risk should be considered when setting investment guidelines, which was a major factor in the fund’s decision to recommend divesting oil and gas stocks.
In fact, one the bank’s board members, Kjetil Storsletten, introduced a “special remark” in the letter, agreeing that the advice works if the fund is considered in isolation, but changes when a broader perspective is taken on the nation’s wealth.
“This perspective indicates that higher weights should be assigned to countries and markets with a lower correlation with Norwegian government revenue and Norwegian economic output, and lower weights to countries and markets that move more closely in line with Norwegian income,” he said.
This article provided by Bloomberg News.