SOFAZ talks on passive investing in highly diversified indexes

Oil&Gas Materials 28 March 2019 12:53 (UTC +04:00)

Baku, Azerbaijan, March 28

By Leman Zeynalova – Trend:

The stock portfolio of the State Oil Fund of Azerbaijan (SOFAZ) has been invested in the highly diversified indexes such as MSCI World, MSCI Europe ex UK and S & P 100 with a larger share of investments in the MSCI World index, SOFAZ told Trend in response to a question about passive investing.

“We would like to emphasize that unlike active management, passive management is characteristic of a wide range of institutional investors whose main objectives are to protect investments from inflation and generate income with minimal risk and low management costs,” said the Fund.

As noted by SOFAZ, the MSCI World index includes more than 1,600 shares of large and medium-sized companies in 23 developed countries, representing the following sectors: energy, materials, industry, consumer goods of selective demand, everyday consumer goods, healthcare, finance, information technology, communication services, utilities.

“It is important to note that SOFAZ has investments in all of the ten sectors listed also in the portfolio of financial instruments with fixed income and instruments of the short-term capital market,” the Fund said.

SOFAZ was established in 1999 with assets of $271 million.

Based on SOFAZ's regulations, its funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems.

The main goals of the State Oil Fund include accumulation of resources and placement of assets abroad in order to minimize the negative effect to the economy, prevention of "Dutch disease" to some extent, promotion of resource accumulation for future generations and support of current social and economic processes in Azerbaijan.


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