Investment management

The investment strategies for fixed-income and equity investments are grouped into three broad categories, fund allocation, company investments and asset strategies. This policy sets out principles and requirements related to our investment activities.

Issued 15 December 2017
Last updated 17 January 2020


The purpose of this policy is to provide principles and requirements related to investment activities performed by Norges Bank Investment Management (NBIM). The policy covers execution of investment strategies (excluding unlisted real estate management), and the governance and monitoring of these.


The investment strategies for fixed income and equity investments are grouped into three broad categories, fund allocation, security selection and asset management. These strategies are complementary to take advantage of the fund's long-term outlook and considerable size to generate high returns and safeguard wealth for future generations.

The fund allocation strategies seek to improve the fund's overall exposure to markets and risks by creating a reference portfolio and allocating capital to real assets. Security selection strategies are based on long-term, qualitative and quantitative analysis of sectors and companies. Asset management strategies seek to achieve and systematically enhance the desired market and risk exposure as cost-efficiently as possible.

This policy sets out principles and requirements related to these investment management strategies.

Reference portfolios

  • The reference portfolio shall aim to improve the fund's total long-term return-risk profile within the scope of the management mandate.
  • The reference portfolio shall be a starting point for the fund's investments and specifies the fund's overall market and risk exposure in the medium to long-term.
  • The reference portfolio shall ensure exposure to a diverse set of underlying economic drivers in a controlled manner.
  • The reference portfolio shall ensure diversification and have a broad geographical investment universe to represent the allocation to equities and fixed income.
  • The reference portfolio shall be subject to regular reviews.
  • All change to the reference portfolio shall be subject to committee review and approval. The Chief Risk Officer may approve adjustments of minor magnitude outside the committee.

Investment mandates

  • Investment decisions shall be delegated and regulated through investment mandates. 
  • Investment mandates shall define investment universe, benchmark, risk limits and other specific investment rules as applicable.
  • Investment mandates shall be approved according to delegation and are subject to annual review.
  • All investment mandates are subject to review and monitoring by the risk function.

Investment research

  • Investment decisions shall be based on research. The scope and type of research shall depend on the type of investment decision.
  • As a general rule we shall do internal research rather than rely on research from external providers.
  • Strategic advice to the Ministry of Finance shall be based on academic research and practical experience from financial markets.
  • Fund allocation research shall inform and support the overall long-term asset and risk allocation decisions of the fund.
  • Company research shall be based on fundamental analysis of companies and how they are expected to perform over the long run.
  • Asset management research shall inform and support enhancement and cost-efficient implementation of the fund's market exposure.
  • Research shall be documented and captured in internal systems as appropriate

Investment decisions

  • Portfolio managers may only make investments within their delegated mandates and risk limits.
  • Investment decisions outside mandate restrictions are subject to committee review and approval.
  • Investment decisions for unlisted transactions (pre-IPO) are subject to committee review and approval.
  • Investments in listed real-estate which exceed 10 % ownership are subject to enhanced company due diligence.
  • Implementation of investment decisions shall ensure fair and equitable treatment of funds and portfolios.

Trade execution

  • Trade execution shall, where feasible, be separated from investment decisions.
  • Trade execution shall aim to ensure as low transaction costs as possible, within given time, mandate and risk constraints.
  • All transaction processing shall be closely monitored to ensure timely settlement. Any deviations shall be followed-up and corrected.
  • Transaction processing shall seek to achieve the highest possible automation in order to reduce operational risk and transaction cost.
  • Asset holdings, cash and corporate actions shall be reconciled with the custodian on a regular basis.
  • Order aggregation, crossing, execution and allocation of holdings between different funds and portfolios shall be fair and equitable.
  • Trade execution shall be captured in our investment management platform.

Cash management

  • Cash management activities shall ensure that portfolio liquidity needs can be met on an on-going basis.
  • Cash management activities shall aim to minimise the cost of funding short cash balances and maximise the return on investing long cash balances.
  • Cash management activities shall aim to diversify and reduce counterparty and credit risk.

Securities lending

  • Securities lending activities shall be conducted to increase the income for the fund.
  • Securities lending may be conducted internally, or with external securities lending agents.
  • Securities lending shall only be conducted with approved counterparties.
  • The security lending portfolio shall not have economic exposure, or be used to leverage risk positions.
  • Securities lending transactions shall be adequately collateralised.
  • Mechanisms shall be in place to recall securities lent out.

Portfolio management

  • Portfolio managers are responsible for adhering to the restrictions of their investment mandate.
  • Portfolio managers should generally be involved in voting decisions for investments under their coverage.
  • Portfolio managers are responsible for corporate actions within their portfolios.
  • Corporate actions that significantly impact several portfolios should be coordinated between the respective portfolio managers and managed in the overall interests of the fund.

Mandate monitoring

  • All mandates shall be monitored for adherence to mandate specific investment rules and restrictions.
  • The aggregated investment activities shall be monitored at fund level to ensure compliance with the mandate from the Ministry of Finance, supplementary rules from the Executive Board and the principles of fair and equitable treatment of funds.
  • A breach of any mandate shall be followed-up and managed accordingly.
  • Any breach of the Ministry of Finance mandate shall be reported to the Executive Board and managed accordingly.

Download the policy (pdf)