* Shares of U.S. investments in portfolio at record
* Neutral on present level of investments -CEO
* At ease with present level of exposure to China
* But they will have to rise considerable in time-CEO
* 2016 return means each Norwegian earned $10,000
(Recasts with U.S., China)
By Gwladys Fouche
OSLO, Feb 28 Norway's $900-billion sovereign
wealth fund, the world's largest, is neutral on investing in the
United States despite its share of U.S. investments in its
portfolio reaching a record high, its CEO said on Tuesday.
The fund also said it was comfortable with its present level
of investments in China, the world's second largest economy, but
that they would have to rise "considerably" at some point.
It invests the proceeds from Norway's revenues from oil and
gas production in foreign stocks, bonds and real estate. Its
value corresponds to about $171,000 for every Norwegian man,
woman and child.
The U.S. is the largest country holding for the fund,
representing 42.3 percent of the fund's total value at end-2016,
or roughly $380 billion, against 38.9 percent at end-2014.
"We are currently neutral regarding our investments in the
U.S. with the actual portfolio as well as the reference index
from our owner, the (Norwegian) finance ministry," said CEO
"The major shift in the portfolio in the past few years has
been more investments in the U.S. and less in Europe," he told
reporters during a news conference presenting the fund's 2016
He declined to answer questions about the Trump
administration, whose protectionist agenda clashes with the
fund's global investment approach.
The fund earned a return of 2.17 percent in the fourth
quarter due to strong equity markets, and 6.9 percent for 2016 -
the equivalent of earning $10,000 for every Norwegian.
On China, Slyngstad said he was comfortable with the fund's
current exposure to the world's second-largest economy, despite
it representing just 2.0 percent of the fund's overall value at
end-2016, or roughly $18 billion in stocks and bonds.
As a long-term, global investor, the fund is keen for its
portfolio to reflect the balance of the global economy.
"We are currently at ease with the investments we have in
China," said Slyngstad. "But we recognise that it is a very
large market and that in time the fund will have considerably
more investments in (China). But we cannot say anything about
Norway's wealth fund is often touted as a model for others
to follow and many will seek their advice, which the fund will
Speaking generally, Slyngstad told Reuters that "we of
course, from time to time, discuss with other sovereign wealth
funds, present and potential future ones, on the investment
He declined to say whether the fund had received a request
for advice from Saudi Arabia on how to run a wealth fund, which
Riyadh plans to do after its IPO of oil firm Saudi Aramco.
FIRST YEARLY WITHDRAWAL
In 2016, the Norwegian state withdrew 101 billion crowns to
pay for public expenses at a time of declining oil and gas
revenues, the first year it does so.
The fund also said it expected its size not to grow at the
same rate between 2017 and 2019 as it did between 2014 and 2016.
"The fund has more than doubled in size over the past five
years," Slyngstad told a news conference. "We have had an
unusual good return ... We can't expect the same return ahead."
"We have been lucky that the high returns have happened when
the value of the fund has been high."
(Reporting by Gwladys Fouche; Editing by Terje Solsvik and Tom