Norway's wealth fund urges caution in stock markets

Norges Bank Investment Management (NBIM), one of the world’s largest investors, urged caution in stock markets amid growing uncertainty and concerns over economic forecasts, which are heightening risks.

NBIM, which manages Norway’s $1.8 trillion sovereign wealth fund, stressed the importance of clarity regarding future challenges, while maintaining its stance of not making significant changes to asset allocations in the short term.

"We started with 70% in equities and 30% in bonds, and that’s typically where you will find us in any market situation. However, you have to be realistic,” Trond Grande, Deputy CEO of NBIM, said in an interview with CNBC on Oct. 23. 

“The fund that we run has doubled in size over the last five years. Our equity portfolio has returned more than 100%. So, I think it is a time of being a little bit cautious,” he added.

Grande cited concerns such as political uncertainty in the United States ahead of the upcoming presidential election, China’s stimulus-driven efforts to restore confidence in its economy, and the potential for weak growth in Europe.

“So, it is a time to be a little bit cautious, and I think the risks are more on the downside in the equity markets than on the upside,” Grande concluded.