* Sold UK, French, Spanish govt debt
* Raised exposure to US, Japan, Mexico, South Korea, Russia
* Increased share of stocks in portfolio at expense of bonds
OSLO, Nov 2 Norway's $660 billion sovereign
wealth fund cut its exposure to Europe's troubled economies
further in the third quarter, buying into global shares instead
as it rode a global stock market rally.
The oil fund, one of the world's biggest investors, said it
had cut its exposure to government debt in France, Spain and
Britain, and continued to keep minimal or no exposure to Greece,
Ireland and Portugal, it said.
The fund, which holds $130,000 for each of Norway's 5
million people, has been gradually pulling out of euro zone
assets, especially those on the bloc's periphery, and aims to
cut Europe's weight in its portfolio permanently.
It only gives a detailed breakdown for its top ten equity
and fixed income holdings, so there was no further detail on how
much the fund had cut back its Spanish exposure.
It cut its holdings of French government debt by 17 percent
to 58.9 billion Norwegian crowns ($10.4 billion).
Instead of Europe, the fund favours major emerging and
developed economies and increased its exposure to fixed income
in the U.S., Japan, Mexico, South Korea and Russia, it said in a
The fund returned 4.7 percent on its investments in the
quarter, improving on a second quarter loss of 2.2 percent and
lifted the share of stocks in the portfolio to 60.3 percent from
59.6 percent three months earlier.
"The result was largely driven by a rally in global stock
markets," Yngve Slyngstad, the fund's chief executive said.
"Stocks gained the most in Europe, where the fund has about half
of its shareholding."
Global investors boosted equity holdings to their highest in
six months in October but unlike Norway, they also lifted their
holdings of euro bond holdings, a Reuters poll showed this week.
The survey of 46 funds in the United States, continental
Europe, Britain and Japan showed investors grew increasingly
confident that the worst of the euro zone has passed and also
preferred stock on efforts by major central banks to bolt
interest rates to near zero.
The Norwegian fund, which manages the country's surplus oil
revenue, is expected to grow to 3.793 trilllion crowns ($664
billion) by the end of this year and 4.281 trillion crowns ($750
billion) by the end of 2013.