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SOFAZ to continue pursuing strategy to increase long-term return on equity

25 May 2018 [17:51] - TODAY.AZ

By  Trend

As part of its investment policy, the State Oil Fund of Azerbaijan (SOFAZ) will continue to pursue a strategy to increase the long-term return on equity considering the risks in accordance with conditions in the financial markets and in the economy, the SOFAZ told Trend.

It was also noted that the SOFAZ portfolio is highly diversified both in terms of types of assets and at the currency level.

"Presently, SOFAZ’s investment portfolio includes financial instruments expressed in about 20 currencies," the Fund said. "The attractiveness of financial instruments of a country expressed in local currency depends on the analyses of financial markets and economies of this country."

The Fund noted that each new investment is also assessed considering its specific weight in relation to the whole portfolio and the correlation of assets, thus preventing the excess of the share of investments in any type of financial instruments or the sector of economy.

"Upon further consideration of the appropriate investment, the compliance with the limits of the currency ratings established by the investment rules is also taken into account," the Fund added.

The total investment portfolio of SOFAZ as of April 1, 2018 amounted to $37.63 billion, or 100 percent of the total assets.

According to the results of the first quarter of 2018, 48.8 percent of the total investment portfolio of SOFAZ was fixed in US dollars (about $18.36 billion), 34.4 percent of the Fund's investment portfolio in euros - 10.51 billion euros (compared to 35.7 percent in 2017), 4.9 percent in British pounds (£1.32 billion), 1 percent in Turkish Lira, 0.7 percent in Australian dollars, 1.1 percent in Russian rubles, 1.2 percent in Korean won, 1.4 percent in Chinese yuan, 1.6 percent in Japanese yen and 1.5 percent in other currencies. The rest of the portfolio (3.4 percent, or about $1.29 billion) is fixed in gold.

As of April 1, 2018, the assets of SOFAZ increased by 5.1 percent compared to the beginning of 2018 and amounted to $37.6 billion.

The State Oil Fund was established in 1999, and at that time its assets amounted to $271 million.


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