Norway's SWF faces lower returns as bond yields decline

Oslo

NORWAY'S sovereign wealth fund (SWF), the world's largest, faces diminishing returns due to low bond yields and should reduce its fixed-income portfolio in favour of real assets, its central bank governor said on Thursday.

The US$860 billion fund, built up from oil and gas income, is now worth twice as much as Norway's non-oil GDP. But measured in relation to the economy, its size has probably peaked, years earlier than expected, as oil income falls and budget spending increases.