Baku, Azerbaijan, Dec. 5
By Maksim Tsurkov – Trend:
The State Oil Fund of Azerbaijan (SOFAZ) plans to increase the proportion of public and private equities in its investment portfolio to further diversify the fund’s assets, SOFAZ Deputy CEO Israfil Mammadov said, Reuters reported.
SOFAZ submitted a proposal to the supervisory board to increase its investment in public and private equities by up to 25 percent in its portfolio, Mammadov said.
"It will be done step-by-step at the expense of fixed income," he said.
He added that any risks related to investment in equities "could bring some volatility over the short-term but over longer term this strategy should earn higher returns because of risk-return trade-off."
Mammadov also noted that the aim of investments in real estate was to enhance returns and reduce volatility by achieving greater diversification both geographically, but also within various real estate asset classes.
No changes are expected in the fund's foreign currency portfolio, keeping the share of the US dollar at 50 percent, the euro at 35 percent, the pound at 5 percent and other currencies at 10 percent, according to Mammadov.
He said the fund also had no plans to sell its assets in Russia, where it owns a multi-use commercial property located in central Moscow and is a shareholder in VTB Bank.
“Our investments are not speculative and have long-term goals,” Mammadov added.