Sept. 9 (Bloomberg) -- Norway, which has amassed the worldâs second-biggest sovereign wealth fund, says Greece wonât default on its debts.
The Nordic nationâs $450 billion Government Pension Fund Global has stocked up on Greek debt, as well as bonds of Spain, Italy and Portugal. Finance Minister Sigbjoern Johnsen says he backs the strategy, which contributed to a 3.4 percent loss on European fixed income in the second quarter, compared with gains on bonds in Asia and the Americas.
âThe point is, do you expect these guys to default?â said Harvinder Sian, senior fixed-income strategist at Royal Bank of Scotland Group Plc, in an interview. âNorway has taken the view that they will not. The Greek holdings are particularly interesting because the consensus in the market is that they will at some point restructure or default.â
Norway says its long-term perspective will protect it from losses. âOne could say we are investing for infinity,â Johnsen said in an Aug. 27 interview. âIt is important when you look at the time scope of the fund and the investments that there should be a portion of active management.â
The fund, which manages Norwayâs oil and gas wealth, mostly buys securities in proportion to their importance in global indexes. By using its leeway to stray from those benchmarks using so-called active management, the fund has beaten those measures by an annual average of 0.3 percent since 1998.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aKkAnJYH0Ey4&pos=1
The Nordic nationâs $450 billion Government Pension Fund Global has stocked up on Greek debt, as well as bonds of Spain, Italy and Portugal. Finance Minister Sigbjoern Johnsen says he backs the strategy, which contributed to a 3.4 percent loss on European fixed income in the second quarter, compared with gains on bonds in Asia and the Americas.
âThe point is, do you expect these guys to default?â said Harvinder Sian, senior fixed-income strategist at Royal Bank of Scotland Group Plc, in an interview. âNorway has taken the view that they will not. The Greek holdings are particularly interesting because the consensus in the market is that they will at some point restructure or default.â
Norway says its long-term perspective will protect it from losses. âOne could say we are investing for infinity,â Johnsen said in an Aug. 27 interview. âIt is important when you look at the time scope of the fund and the investments that there should be a portion of active management.â
The fund, which manages Norwayâs oil and gas wealth, mostly buys securities in proportion to their importance in global indexes. By using its leeway to stray from those benchmarks using so-called active management, the fund has beaten those measures by an annual average of 0.3 percent since 1998.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aKkAnJYH0Ey4&pos=1
