SOFAZ increases share of dollar in its investment portfolio

As of April 1, 2020, the investment portfolio of the State Oil Fund of Azerbaijan (SOFAZ) made up $41,339,100,000, down 4.6% or $1,983,600,000, Report informs, citing the Fund.

In the reporting period, 66% of the investments were in USD, which is 9.4 percentage points in quarterly comparison. Instead, the Fund decreased the share of EUR in its portfolio from 31.4% to 22.9%, GBP – from 5.1% to 4.8%.

As at the end of March, the share of AUD in the portfolio was 0.5% (-0.1 percentage point), TRY – 0.8% (unchanged), RUB 0.5% (-0.3 percentage point), KRW (Korean won) 0.5% (unchanged), CNY 1.2% (unchanged), JPY 1.5% (unchanged), other currencies 1.3% (-0.2 percentage point).

The proportion of investments on bonds and other money market instruments remained unchanged at 68.7%. Instead, the Fund changed the share of its stakes in the portfolio from 14.1% to 12.4%, real estate from 5.8% to 6.1%, gold from 11.4% to 12.8%.

As of April 1, 2020, 58% of bonds and other money market instruments, in which SOFAZ invested, received AAA rating, up 15.2 percentage points from early 2020. Instead, the Fund reduced the share of instruments with AA rating from 16.3% to 12%, with A rating – from 29% to 19.2%, with BBB rating – from 10.5% to 9.4%. The proportion of non-investable instruments remained unchanged at 1.4%.

In the reporting period, 37.8% of bonds and other money market instruments, in which SOFAZ invested, was placed for up to 1 year, 29% - for 1-3 years, 20.3% - for 3-5 years, 12.9% - for more than 5 years. These figures were respectively 34%, 35.6%, 21.7%, and 8.7% three months ago.

As at the end of March, the share of European countries in the Fund’s investments was 33.2%, of the Asia-Pacific region – 33.1%. These figures were 33.8% and 33.4% at the end of 2019. Among the other regions, the share of North America changed from 24.9% to 27.2%, of Australia and New Zealand – from 2% to 1.1%. The proportion of international financial organizations, the Middle East, and South America remained unchanged at 4.7%, 0.7%, and 0.1%.

During the first quarter, the proportion of the developed countries in SOFAZ investments rose from 63.2% to 63.9%, of developing countries - dropped from 32% to 31.4%, of the international organizations – remained unchanged at 4.7%.