BAKU, Azerbaijan, December 11. The investment strategy of the State Oil Fund of Azerbaijan (SOFAZ) is primarily aimed at ensuring macroeconomic stability, SOFAZ Executive Director’s Advisor Bahruz Bahramov told Trend.
According to Bahramov, the strategy is also aimed at reducing the negative effects of economic shocks on the economy of our country, that is, it plays the role of a ‘safety cushion’ in the event of economic instability in foreign markets
“SOFAZ's foreign currency investment portfolio is distributed as follows: 70.8 percent - in the US dollar, 19 percent - in the euro, 4.7 percent - in pound sterling, and the rest (5.5 percent) - in the Australian dollar, Turkish liras, Russian ruble, Chinese yuan, Japanese yen, and other currencies," the advisor noted.
"In the fund's portfolio, about 63 percent were fixed income and money market instruments, 18.7 percent - stocks, 6.3 percent - real estate, 12 percent - investments in gold (101.8 tons)," Bahramov explained.
"Regarding fixed income and money market instruments, 69.9 percent of those assets were invested in AAA credit rating instruments, and the rest - in AA (16.7 percent), A (10 percent), and BBB (2.6 percent) credit rating instruments. Only 0.8 percent of the fund's portfolio is invested in non-investment-grade instruments," he further said.
Regarding the equity investments of the fund, we have formed a portfolio covering 1600 companies in 26 developed countries of the world in 14 currencies.
The advisor also noted that SOFAZ, in partnership with 13 companies, has invested in over 500 properties all over the world. Since the start of real estate investments back in 2012, the strategy was to build a diversified portfolio across developed countries of North America, Europe and Asia Pacific region covering office, retail, residential, industrial, hotel and other sectors of this market" Bahramov said.
Speaking about the fund's investments, he pointed out that the current geo-economic and geopolitical realities affect them in any way. "The investment portfolio of SOFAZ, as well as the portfolios of other institutional investors, is affected by the consequences of COVID-19, unstable situation in the energy market, inflation, geo-economic and geopolitical changes," the representative of SOFAZ noted.
"SOFAZ is an institutional investor with a long and medium-term focus, so our investment decisions are not speculative or based on recent short-term fluctuations in capital markets “ Bahramov added.