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.
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.
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.
Holdings in fixed-income markets
Percentage of market value of bonds in the benchmark index
Source: Bloomberg Barclays Indices, Norges Bank Investment Management
The fund's largest bond holdings
As at 31 December 2018. Millions of kroner
|United States of America||US||638,715|
|Federal Republic of Germany||Germany||106,116|
|South Korean government||South Korea||43,366|
|Canada Mortgage & Housing Corp||Canada||31,785|
|Kreditanstalt für Wiederaufbau||Germany||27,475|
|Government of Indonesia||Indonesia||25,114|
|Government of South Africa||South Africa||21,139|
|European Investment Bank||International organisation||19,530|
|Government of Switzerland||Switzerland||18,757|
|Government of Canada||Canada||18,275|
|Government of Malaysia||Malaysia||16,958|
The fund's total holdings are published annually with the annual reporting on the fund. The annual holdings as at 31 December are available from inception in 1998.