Norwayâs Government Pension Fund Global, the worldâs largest sovereign wealth fund with a portfolio value in excess of $1.4 trillion, raised its India bets last year amid a surge in Indian equities.
Its Indian holdings as a percentage of its total equity portfolio rose by 20 basis points (bps) year-on-year in calendar year 2023 to 2.2 per cent, the fundâs annual disclosures show. Considering a total equity portfolio of about $1 trillion, the fundâs India equity investments amount to about $22 billion.
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The increase in India weight came in a year that saw net purchases by foreign portfolio investors (FPIs) to the tune of over $20 billion. India’s benchmark index Nifty 50 rose 20.1 per cent in CY23.
India has the second largest weight in its emerging market portfolio after China, whose weight reduced by 70 bps last year to 3.1 per cent. The India weight in the fundâs equity portfolio stood at 1.6 per cent at the end of CY21, implying a rise of 60 bps in the last two years.
ICICI Bank and Infosys were the top two India holdings for the fund, with a market value of more than â¹7,000 crore each at the end of CY23, data from Primeinfobase (Corporate Database Information) shows. Some of the other top holdings include Axis Bank (â¹6,416 crore), Varun Beverages (â¹3,976 crore) and M&M (â¹3,184 crore). The top 10 investments amount to a market value of â¹40,911 crore.
Emerging markets accounted for 10.2 per cent of the fundâs equity investments, lower than the 10.9 per cent at the end of CY22.
The fundâs equity portfolio returned 21.3 per cent in 2023. The fund was invested in 8,859 companies at the end of 2023, down from 9,228 a year earlier.
âDespite strong inflation, rising policy rates and geopolitical turmoil, the stock market rallied after a weak 2022. Higher interest rates reined in inflation during the year without sparking a sharp economic downturn. US technology stocks in particular contributed to the positive return, driven mainly by the largest technology companies,â the fundâs annual report said.
Technology stocks were the best performers in 2023 with a return of 51.9 per cent. The fundâs top holdings include Microsoft ($33 billion), Apple ($31.3 billion), Alphabet ($18.1 billion), Amazon ($16.4 billion) and NVIDIA ($13.5 billion).
The fund has 70.9 per cent invested in equities, 27.1 per cent in fixed income, 1.9 per cent in unlisted real estate and 0.1 per cent in unlisted renewable energy infrastructure.
Indiaâs market cap is currently the 5th largest globally but Indiaâs weight in global indices is still low at 1.6 per cent. This should change as market free float rises and some weight anomalies get sorted out, according to Jefferies. India will become nearly a $10 trillion market by 2030 — impossible for large global investors to ignore, the brokerage said in a recent note.
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