The State Oil Fund of Azerbaijan (SOFAZ) increased the share of gold in the investment portfolio from 5.4 to 7.4 percent in January-March 2019 referring to the Fund’s report.
According to the report, the amount of gold held by SOFAZ is 71.75 tons. Most of the fund’s investments are concentrated in bonds and money market instruments – their share in the portfolio decreased from 76.5 to 74 percent during the quarter.
Shares in the investment portfolio accounted for 13.4 percent, and real estate for 5.2 percent. Three months earlier, these figures stood at 12.8 and 5.3 percent, respectively.
The current investment portfolio of SOFAZ is 40.27 billion dollars. The portfolio structure by currencies is as follows: 55 percent in US dollars, 33.3 percent in euros, 5 percent in pounds sterling, 0.6 percent in Australian dollars, 0.8 percent in Turkish lira, 0. 6 percent in Russian rubles, 0.5 percent in Korean won, 1.2 percent in Chinese yuan, 1.6 percent in Japanese yens, and 1.4 percent in other currencies.
At the same time, the report notes that 7.4 percent ($2,973,600,000) of the dollar portfolio consists of investments in gold.
The share of Azerbaijani manat accounts for about 40,000 in US dollar equivalent.
About 37.5 percent of SOFAZ assets are located in Europe, 30.01 percent in the Asia-Pacific region, and 22.17 percent in North America. The shares of the remaining regions account for significantly less. For example, the fund’s Middle Eastern investments account for 0.75 percent of the entire portfolio, Australian and New Zealand investments for 2.35 percent, and South American investments for 0.05 percent.
Most of the investment portfolio of the fund (66.25 percent) is concentrated in developed countries, while 26.83 percent are located in developing countries and 6.92 percent in international financial organizations.
The State Oil Fund of Azerbaijan was established in 1999, and its assets at that time amounted to $271 million.
According to the regulations on SOFAZ, its funds can be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving problems of national importance.
The main objectives of SOFAZ are to accumulate funds and allocate the Fund’s assets abroad for minimizing the negative impact on the economy, prevent the ‘Dutch disease’ to some extent, ensure the accumulation of funds for future generations and maintain current socio-economic processes in the country.
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