Azerbaijani SOFAZ talks main goals of its investment strategy

BAKU, Azerbaijan, The investment strategy of the State Oil Fund of Azerbaijan (SOFAZ) is primarily aimed at ensuring macroeconomic stability, SOFAZ Executive Director’s Adviser Bahruz Bahramov told Trend.


According to Bahramov, the strategy is also aimed at reducing the negative effects of economic shocks on the economy of our country, that is, it plays the role of a ‘safety cushion’ in the event of economic instability in foreign markets


Along with the above, the transfer of funds from SOFAZ to the state budget ensures the formation of fiscal policy and the state budget, he said.


“Regarding the investment portfolio of the fund, we have formed a portfolio covering 1,400 companies in 26 developed countries of the world in 14 currencies. SOFAZ’s foreign currency investment portfolio is distributed as follows: 70.8 percent – in the US dollar, 19 percent – in the euro, 4.7 percent – in pound sterling, and the rest (5.5 percent) – in the Australian dollar, Turkish liras, Russian ruble, Chinese yuan, Japanese yen, and other currencies,” the advisor noted.


“In the fund’s portfolio, about 63 percent were bonds and money market instruments, 18.7 percent – stocks, 6.3 percent – real estate, 12 percent – investments in gold (101.8 tons),” Bahramov explained.


“According to the credit rating, 69.9 percent of assets were invested in AAA rating instruments, and the rest – in AA (16.7 percent), A (10 percent), and BBB (2.6 percent) credit rating instruments. Only 0.8 percent of the fund’s portfolio is invested in non-investment-grade instruments,” he further said.


The advisor also noted that SOFAZ, in partnership with 13 companies, has invested in over 500 properties.


“More than 60 percent of them are located in North America and Europe. Along with this, we have invested in real estate, including office premises and retail, residential, industrial, and logistics facilities in the Asian region,” Bahramov said.


Speaking about the fund’s investments, he pointed out that the current geo-economic and geopolitical realities affect them in any way.


“The investment portfolio of our fund, as well as the portfolios of investors and funds in other countries of the world, is affected by the consequences of COVID-19, unstable situation in the energy market, inflation, geo-economic and geopolitical changes,” the representative of SOFAZ noted.


“Given that our investments are medium-term and long-term, we don’t consider some of the losses incurred by us this year as losses, because in the medium and long term we expect full compensation for losses and making a profit,” Bahramov added.


Source: TREND News Agency