BAKU, Azerbaijan, Mar. 5
By Nargiz Ismayilova - Trend:
Azerbaijan’s State Oil Fund (SOFAZ) increased the share of government bonds in the investment portfolio in 2019, while the share of investments in the financial sector was reduced, SOFAZ Executive Director Israfil Mammadov told Trend.
Mammadov added that the sensitivity of the portfolio to the changes in interest rates (effective duration) was also increased by investing in bonds with a higher weighted average term of the payment flow, which leads to an increase in yield during a period of a long fall in interest rates.
“These decisions have reduced the overall credit risk of the portfolio. Also, as a result of this, the correlation of fixed income financial instruments with other types of assets was reduced, which contributed to further diversification of the investment portfolio," Mammadov said.
"Regarding investments in private equity shares and real estate, SOFAZ began investing in these assets in order to build a globally diversified portfolio, and in accordance with this, it is planned to continue investing in North America, Europe and the Asia-Pacific Region, through stock and joint investments,” he said.
“In connection with the plans for certain types of assets, I would like to note that the strategy for financial tools with fixed income and tools of the short-term capital market depends primarily on the macro environment, as well as the monetary policy of a particular country and the yield on the corporate bond market,” Mammadov said.
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