Baku: The State Oil Fund of Azerbaijan (SOFAZ) has reported a significant increase in its assets, amounting to $21 billion over the past three years.
According to Azeri-Press News Agency, this development is attributed to successful investment strategies and favorable market conditions, as revealed by SOFAZ Executive Director Israfil Mammadov in a recent interview.
Mammadov highlighted that despite declining oil revenues, 2025 has been a particularly successful year for SOFAZ in terms of investment income. The fund's assets grew from $60 billion at the beginning of the year to $70.2 billion by the end of the third quarter. This growth has been largely driven by a strategic focus on gold investments, which contributed $6.8 billion in non-budgetary revenue during the first nine months of 2025.
The fund's investment strategy, which emphasizes long-term balance and sustainability, has been instrumental in achieving these results. SOFAZ has gradually increased the share of higher-income, albeit riskier, financial instruments in its portfolio since 2012. This approach aims to ensure sustainable results in the long term, even amid short-term market volatility.
Gold investments have played a crucial role in SOFAZ's strategy, serving as a hedge against global economic uncertainties. By the end of the third quarter of 2025, the fund's gold assets were valued at $23 billion, generating $11 billion in revenue since 2012. The fund views gold as a strategic asset that strengthens its overall portfolio resilience and financial security.
Moreover, SOFAZ's investments in global technology giants like Amazon, NVIDIA, Meta, and Tesla have garnered public interest. These investments are part of a broader strategy based on global equity market indices, reflecting the increasing importance of the technology sector in the global economy. The fund has achieved a 314% return since the inception of its equity indices, with an annual return of 11.5% as of September 2025.
In response to declining oil prices, SOFAZ has prepared its budget for 2026, assuming a crude oil price of $65 per barrel. The fund aims to mitigate the impact of potential revenue declines through diversified investment strategies and prudent risk management.
SOFAZ has also demonstrated a growing interest in infrastructure projects, with investments in sectors such as private schools, railways, and airports. These investments are part of a long-term strategy to enhance portfolio resilience against market volatility and ensure sustainable profitability.
Looking ahead, SOFAZ plans to gradually reduce its transfers to the state budget, aiming to strengthen the government's fiscal policy and optimize the fund's asset management. This approach will provide greater flexibility in pursuing structured investment opportunities in global markets.
In terms of currency auctions, SOFAZ has continued to support macroeconomic stability through the execution of its budgetary obligations. The fund's budget for the current year includes expenditures totaling AZN 14.6 billion, with AZN 10.9 billion already executed by the end of the third quarter.
SOFAZ remains committed to financing nationally significant projects and has outlined plans to support initiatives in vocational education and international dual-degree programs. The fund's strategic objectives for 2026 include preserving assets, ensuring sustainable investment profitability, and adapting to changing global economic conditions.
The fund's ongoing focus on strengthening institutional building, improving corporate governance, and enhancing human capital is expected to further bolster its operational efficiency. SOFAZ aims to explore new investment opportunities, develop international partnerships, and expand strategic investments to maintain a balanced risk-return profile and increase reserves in the long term.