The world’s largest sovereign wealth fund, the Government Pension Fund Global of Norway, is increasing betting on corporate bonds in its Indian fixed income portfolio.
According to the latest information from the fund, he added two new names – Adani Ports & Special Economic Zone and Britannia Industries. Its investments are worth around $ 100 million in the Adani business and around $ 250,000 in Britannia.
The total proportion of corporate bonds in its fixed-income securities portfolio in India increased from 5.1% to 8.2% in 2019. Other securities include Reliance Holding USA and Reliance Industries. The two companies represent an additional $ 95 million in debt assets.
Indian government debt accounts for the majority of its holdings. The fund held instruments valued at $ 2.16 billion.
The figure was $ 1.96 billion last year. It also held instruments from the Export-Import Bank of India under the heading “government bonds”. Investments in Reliance Industries had also been classified as “government bonds”.
In response to a request from Business Standard, A spokesperson for the fund said it was a classification error.
“Bonds denominated in dollars, euros, pounds and yen went from 82.6% to 84.6% of fixed income investments. Debt instruments issued by governments and companies in countries classified as emerging markets will be limited to 5% of the market value of the bond portfolio in the future, “said the fund in its annual report.
Norway created the fund after its oil discoveries to provide a cushion against fluctuations in oil prices and help meet future needs. It invests in all asset classes, including stocks, fixed income securities and real estate.
The fund is now worth more than $ 1.1 trillion, of which approximately 70.8% is invested in equities. Fixed income securities represent 26.5%.
“In the first few years, yields were low, but the fund grew due to large inflows. Over the past decade, the fund has experienced a smaller inflow, but the return (was higher) … The solid performance of the past decade has been facilitated by the purchase of stocks … during the financial crisis. The fund is now worth more than the cumulative net wealth of the Norwegian people and three times the country’s GDP. We now have wealth invested in the global financial markets that has exceeded the government’s total oil revenues over the past 50 years, “said the report.
Instruments that are no longer in the fund’s fixed income portfolio include REC and Power Finance Corporation.