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The proposal to parliament follows an earlier recommendation by
the Norwegian central bank, the fund's manager, and could add
investments of $50 billion in U.S. stocks, a Reuters calculation
showed based on government data.
"The changes we are proposing will ensure the investments better
represent the distribution of value creation in listed companies
globally," Minister of Finance Jan Tore Sanner said in a
statement.
The world's largest sovereign fund has historically given a
higher weighting in its portfolio to European stock markets,
focusing on countries that Norway does the most trade with, and
a lower weighting to those of North America.
It will continue to favour Europe however, the proposal showed,
but to a lesser degree than in the past. A move to full
neutrality would have shifted well over $100 billion out of
Europe, according to finance ministry data.
While the fund currently owns about 1.5% of all stocks globally,
its ownership in Europe amounts to 2.6% of all listed shares
while its holdings in the Americas is only just over 1%.
Despite its lower weighting, North America represented 41.6% of
the fund's overall $760 billion stock market holdings at
end-June and would rise to 48% under the amended framework,
while Europe would decline to 26.5% from 33% currently.
The minority centre-right cabinet of Prime Minister Erna Solberg
must seek approval from parliament for any major strategic
shifts at the fund, a process that could take months to complete
and which may involve making compromises.
The central bank has said its advice was not based on any
particular view on future return in individual markets or
regions.
The fund last rejigged its regional weighting in 2012 and has
since reduced its exposure to European shares from 50% of the
total equity holdings to 33.5% by the end of 2019.
(Editing by Gwladys Fouche and Toby Chopra)
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