Baku. 5 November. REPORT.AZ/The investment strategy of the State Oil Fund of Azerbaijan (SOFAZ) is mainly comprised of passive investments in indices such as MSCI World, MSCI EUROPE ex UK and S&P, which reflect stakes of the largest global companies of the developed countries, SOFAZ told Report.
According to the Fund, the investments within this frame are proportionally made in every stake in the index in accordance with their share in that index, not in stake or stakes chosen for any specific criterions.
"These indices cover stakes of more than 1,600 large and medium-sized companies in 23 countries, which are denominated in 14 foreign currencies," the Fund said.
As of diversification of the investment portfolio, SOFAZ said that special attention is paid to diversification of the portfolio: "As is known, every investment is characterized with different risks. For reduction of these risks to minimum, special attention is paid to the diversification of the portfolio. SOFAZ’s investment strategy aims at forming an investment portfolio creating conditions for increasing the profitability in the minimum available limit of the risks. We think that SOFAZ has formed a sufficiently diversified investment portfolio. Since 2012, investment portfolio has been including financial instruments such as shares (as well as private shares), real property, gold and according to the current investment policy, their total share in the portfolio can make up nearly 40%. Our main goal is to assess new investment proposals within the current financial distribution of the SOFAZ funds and determine potential investment directions’.
SOFAZ said it is now researching real property investments in the perspective, transparent markets of North America, Europe, Asia-Pacific region, which are attractive for investments and promise profitability taking into account the risks. The Fund will continue to make investments in real properties in the future.