Fixed-income management

The fund’s fixed-income investments are allocated 70 percent to bonds issued by governments and related institutions and 30 percent to securities issued by the corporate sector.

Government bonds

The investments in government bonds are distributed according to the economic size of a country, as measured by its gross domestic product. Norges Bank Investment Management also considers the strength of a country’s public finances when investing in government bonds.

The majority of the investments are in developed countries, with a high percentage of government bonds denominated in euros, dollars, pounds and yen. Around 10 percent of fixed-income investments are in government bonds in currencies from emerging markets. These bonds generally have an investment grade credit rating.

Corporate bonds

The investments in corporate bonds include debt issued by companies as well as covered bonds, or debt issued by banks that are secured by a portfolio of mortgage loans. Corporate bonds normally provide a higher return than government bonds.

All corporate bond investments are made after a credit assessment, either external or internal. Holdings in non-investment grade bonds are targeted to not exceed 5 percent of the overall fixed-income portfolio.

The fund's largest bond holdings

Issuer Country Holding 
IssuerUnited States of AmericaCountryUSHolding                                                   650 308
IssuerJapanese governmentCountryJapanHolding                                                   185 108
IssuerFederal Republic of GermanyCountryGermanyHolding                                                     91 036
IssuerUK governmentCountryUKHolding                                                     62 875
IssuerSpanish governmentCountrySpainHolding                                                     56 086
IssuerFrench RepublicCountryFranceHolding                                                     55 721
IssuerSouth Korean governmentCountrySouth KoreaHolding                                                     42 676
IssuerMexican governmentCountryMexicoHolding                                                     41 167
IssuerItalian RepublicCountryItalyHolding                                                     35 662
IssuerKreditanstalt für WiederaufbauCountryGermanyHolding                                                     34 575

Holdings in fixed-income markets

Percentage of market value of bonds in the benchmark index

Source: Bloomberg Barclays Indices, Norges Bank Investment Management

Last saved: 21/08/2019

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