May 08, 2024 (MENAFN via COMTEX) --
(MENAFN - Trend News Agency) BAKU, Azerbaijan, May 8. Since investing instock indices, the State Oil Fund of Azerbaijan (SOFAZ) has earnedmore than $5 billion, the Azerbaijani State Oil Fund (SOFAZ) toldTrend .Since 2012, SOFAZ, in order to diversify its investmentportfolio, has started investing in shares through stock indices the period of implementation of this strategy, as of March31, 2024, the profit has amounted to $5.3 billion, or 226 percent should be emphasized that SOFAZ places great importance ondiversifying the investment portfolio across all types of assets,including equities.
The fund noted that most institutional investors, includingSOFAZ, such as sovereign wealth funds and pension funds, utilize apassive management strategy in making their investments in listedequities.
Additionally, it should be noted that SOFAZ stock index strategyimplies not active selection of shares of certain companies butpassive investment in all shares included in the global index,which consists of more than 1,400 companies, in proportion to theirmarket capitalization.
"While investing in shares on the stock exchange, the fundreplicates the MSCI World Index [Morgan Stanley CapitalInternational World Index], which consists of the largest companiesof the developed world, taking into account the weight of thecompanies included in this index. The MSCI World index, which isthe predominant part of the SOFAZ share portfolio, consists ofshares of 1,465 companies (the total market capitalization of whichis about $70 trillion), covering 11 sectors of the economy in 23developed countries of the world," the fund noted.
MSCI World Index tracking indicators (as of March 31,2024)
Besides, it is worth noting that in addition to tracking theMSCI World index, part of the SOFAZ equity portfolio worth $1.6billion is invested in the euro-denominated MSCI Europe ex UKindex.
"In connection with the recent news in the media, we would liketo state that after the inclusion of Tesla and Intel shares in theSOFAZ portfolio (Intel shares since 2012, since the creation of thestock portfolio, and Tesla shares since 2013, since the inclusionin the MSCI World index), the weight of these shares in the SOFAZportfolio corresponded to the weight of the same shares in the MSCIindex. Generally, a stock index is an aggregate of shares ofpublicly traded companies from different regions, countries,economic sectors, and other factors. Examples of such indices areS&P 500 (500 largest companies of the US stock market), STOXXEurope 600 (600 small, medium, and large companies of developedEuropean countries), and NASDAQ 100 Technology Sector (100 largesttechnology companies)," the Fund noted.
MSCI World index distribution by country and industry(as of March 31, 2024)
"It should be noted that tracking an index under passivemanagement involves building a portfolio by investing in stocksincluded in the index according to their weighting in the index, we would like to state that SOFAZ does not invest inExchange-traded funds (ETFs) or Mutual Funds but directly buysshares of companies included in the index," SOFAZ stated.
Key indicators and return on SOFAZ's investments inlisted equities in developed countries (as of March 31,2024)
| Invested funds | $7,1 billion |
| Profit | $5,3 billion |
| Current value | $12,4 billion |
| Yield from the moment of portfolio creation | 226 percent |
"We would like to point out once again that SOFAZ implements apassive management strategy rather than a speculative and riskystrategy based on the selection of certain stocks. While providinga higher level of diversification, this strategy, like manyinstitutional investors, is more conservative," the fundconcluded.
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COMTEX_452072136/2604/2024-05-08T13:04:38
