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World's Biggest Wealth Fund Sticks Far Below Its Risk Limits 

May 3, 2017

Sveinung Sleire, Bloomberg

Norway’s $940 billion sovereign wealth fund has plenty of room up to its risk limit, and that’s just how it wants it.

The risk the investor took compared with its benchmark even slid in the first quarter. The expected relative volatility dipped to 0.32 percentage point at end of March, compared with 0.34 percentage point at the end of 2016. The level is far below the 1.25 percentage points ceiling set by its overseers at the Norwegian Finance Ministry.

"It’s the risk we want to take now, relatively speaking, and we wish to have some form of buffer toward that limit," Trond Grande, the wealth fund deputy CEO, said in an interview Friday after the investor released its full first-quarter report.

The fund earlier this month reported gains of $35 billion in the first quarter, boosted by the biggest quarterly rally in global stocks in more than three years amid surging economic optimism. But it also said that there was reason to be more “cautious” on continued increases for global stocks.

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