Daily Current Affairs for UPSC – 17 May 2024 : What is  Government Pension Fund Global (GPFG)?  What is Oil Fund?

Why in news ? Bank, the central bank of Norway, has excluded Adani Ports and Special Economic Zone (APSEZ) from its Government Pension Fund Global, over the ‘unacceptable risk’ the company contributes to human rights violations during the times of war and conflicts.

The Norwegian Government Pension Fund Global GPFG is one of the world’s largest fund, owning almost 1.5 percent of all shares in the world’s listed companies. It has holdings in around 9,000 companies worldwide.

Besides, two other companies – Weichai Power Co Ltd and L3Harris Technologies Inc – have also been excluded from the investment by the GPFG.

About The Government Pension Fund Global:

The Government Pension Fund Global, also well-known as the Oil Fund, is a sovereign wealth fund managed by Norway. Here’s a breakdown of its key aspects:

• Origin and Purpose: Established in 1990, it aims to manage revenue from Norway’s oil and gas resources for the long term. This ensures benefits flow not just to the current generation but also to future ones.
• Funding: The fund is primarily fueled by surplus income generated from Norway’s oil and gas sector.
• Size and Scope: As of March 2024, the fund boasts assets under management (AUM) of a whopping US$ 1.626 trillion, making it one of the world’s largest sovereign wealth funds.
• Investment Strategy: The fund invests these vast sums in international financial markets. This diversification helps spread risk and provides exposure to global growth.
• Investment Focus: The fund primarily invests in equities (ownership interests in companies) across 72 countries. They hold a small stake in roughly 9,000 companies worldwide, including giants like Apple and Microsoft.
• Management: Norges Bank Investment Management (NBIM) is entrusted with the responsibility of managing the fund.

Overall Significance:

The Government Pension Fund Global serves a crucial purpose for Norway. It ensures responsible use of the country’s oil wealth, fostering long-term economic stability and preparing for a future beyond oil dependence. The fund’s size and investment strategy also make it a significant player in global financial markets.