Norway's trillion dollar sovereign wealth fund has asked the government for permission to dump oil and gas stocks from its main index in order to soften the impact of falling energy prices over the longer term.
In a letter to Norway's Ministry of Finance, published Thursday, the Deputy Governor of Norges Bank Investment Management Egil Matsen said the move would "will make the government's wealth less vulnerable to a permanent drop in oil and gas prices" but noted that it wasn't necessarily a reflection of "any particular view of future movements in oil and gas prices or the profitability or sustainability of the oil and gas sector."
It said it sees a final decision taking place in the autumn of 2018.
"The analyses show that oil and gas stocks are significantly more exposed than other sectors to movements in oil prices. In periods of stable oil prices, the returns on oil and gas stocks have largely moved in tandem with the broad equity market," the Fund said. "However, in periods of substantial and prolonged oil price changes, the difference in returns between oil and gas stocks and the broad equity market have been considerable. The return on oil and gas stocks has been significantly lower than in the broad equity market in periods of falling oil prices."
The Fund, which has a current value of 8.254 billion Norwegian krone ($1.004 trillion), invests in around 8,985 companies -- around 1.3% of total worldwide listings -- in 77 different countries. Oil and gas stocks comprise around 6%, or $36.5 billion, of the Fund's total exposure.
It has around $205 billion investment in U.S.-listed stocks, according to its website, including Marathon Oil (MRO - Get Report) , Exxon Mobil Corp (XOM - Get Report) , Chevron Corp (CVX - Get Report) and ConocoPhilips (COP - Get Report) . It also has stakes in Royal Dutch Shell plc (RDS.A - Get Report) and BP Plc (BP - Get Report)
Last year, the fund, which is the world's biggest and a key investor in Apple (AAPL - Get Report) and Alphabet (GOOGL - Get Report) proposed raising the weighting of its equity holdings to 70% of its portfolio, from the current 60%. The fund's largest holdings include Nestle (NSRGY , Apple, Microsoft (MSFT - Get Report) and Google, holds 2.53% of Nestle shares and 1.32% of Alphabet, according to FactSet.
(Apple and Alphabet are held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here.)