Friday November 14, 03:47 PM
UPDATE 1-Norway's oil fund shrinks 1.3 pct in Oct
OSLO, Nov 14 (Reuters) - Norway's sovereign wealth fund shrank by 1.3 percent to a preliminary 2.09 trillion Norwegian crowns ($301 billion) in October from the end of September, the central bank's monthly balance sheet showed on
Friday.
Commonly known as 'the oil fund', the Government Pension Fund -- Global invests Norway's oil and gas wealth in foreign stocks and bonds. It has said it owns more than 1 percent of all European equities, making it Europe's biggest equity investor.
The central bank's monthly balance sheet gives a first glimpse of the size of the fund ahead of official quarterly figures on the fund's performance. The fund's third-quarter results are scheduled to be published on Nov. 25.
The fund has been gradually shifting to a 60 percent allocation to stocks from 40 percent, despite global financial turmoil and stumbling equity markets. It held about 50 percent in equities by the end of the second quarter.
It has said that despite the crisis, it would stick to its long-term strategy, and has ruled out changing its plans for investment allocations.
The head of the fund, Yngve Slyngstad, was quoted by national daily news paper Aftenposten on Friday as saying the third quarter will be the worst ever for the fund.
The fund, which puts about half of its assets in Europe, has been praised by pension fund managers and financial market analysts as a model of transparency for sovereign wealth funds in oil-rich states.
In October, the Norwegian crown weakened about 15 percent against the dollar, which should have boosted the value of the fund denominated in the local currency.
When the Labour-led coalition government presented its revised 2008 budget in May this year, it estimated the fund's value at 2.32 trillion crowns ($334.1 billion) by the end of 2008. On Oct. 2, it said it stood by that forecast.
(Reporting by Oslo newsoom; Editing by Ruth Pitchford) ($1=6.943 Norwegian Crown) Keywords: NORWAY WEALTHFUND/
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