Speaker 1: Bloomberg Audio Studios, podcasts, radio.
Speaker 2: News, and Place to Say.
Speaker 3: The Norse Bank Investment Management CEO Nikolay tank and joins
Speaker 3: us now for more. Nicolay, welcome back to the program.
Speaker 3: So a lot has changed since we last spoke. Attitudes
Speaker 3: towards US assets are starting to shift. I just wonder
Speaker 3: how you and the team have started to think about that,
Speaker 3: how you're debating that issue internally over in Norway.
Speaker 2: Well, we have a very long term view on what
Speaker 2: we do.
Speaker 4: So you know, we are invested with roughly half the
Speaker 4: fund in the US and we are here for the
Speaker 4: very long term, so we have not made any major
Speaker 4: adjustments lately.
Speaker 3: So Nikolai, can I rid into that that you view
Speaker 3: this as just a shock to the cycle and maybe
Speaker 3: not a long term shock to the system.
Speaker 4: Well, I think it's very very difficult to say it,
Speaker 4: because when we make scenario analysis here, one of the
Speaker 4: negative things that we see is that if you get
Speaker 4: a disentanglement between the two major training blocks, that's really
Speaker 4: really negative because it's slowed down.
Speaker 2: Slows down growth, increases inflation and zone.
Speaker 4: So it is potentially one of the really negative things
Speaker 4: that can happen here. So I think the out look
Speaker 4: for markets are very very uncertain, given.
Speaker 1: That there has been a shift Nikolay to move at
Speaker 1: least a little bit of assets about large acid allocators
Speaker 1: out of the United States diversified to places like China,
Speaker 1: to India to Europe. Why aren't you doing the same
Speaker 1: and shifting to benchmarks that have a little bit more
Speaker 1: exposure elsewhere.
Speaker 4: Well, we actually are extremely well diversified already. You know,
Speaker 4: we own one and a half percent of all the
Speaker 4: listed equities in the world. In Europe we have more,
Speaker 4: we have closed to three percent, and so in the
Speaker 4: US we have one than a half percent, and we
Speaker 4: also have the same in the rest of the world.
Speaker 4: So I would say we are we are well diversified,
Speaker 4: seventy percent equities, thirty percent bonds, and we also have
Speaker 4: a very very good, really say portfolio which is coming
Speaker 4: in really handy here.
Speaker 1: Well, Nikola, you said previously this morning when you were
Speaker 1: speaking to media and Oslo, that you will correct the
Speaker 1: underweight to US stocks. So you are planning to reinvest
Speaker 1: in US stocks even though you are surprised that we
Speaker 1: haven't seen even more weakness. Why are you redeploying all
Speaker 1: of the money that maybe has lost in terms of
Speaker 1: benchmark allocation to US equities given some of these larger uncertainties.
Speaker 4: Well, the kind of the increased medication to the US
Speaker 4: is part of a program that we've been doing for
Speaker 4: quite some time.
Speaker 2: We still have some work to do here and that
Speaker 2: we will continue to do.
Speaker 4: And you know, we think the larger American companies are
Speaker 4: just great long term investments, and so we are very
Speaker 4: happy to be invested there.
Speaker 5: What sectors can you give us a little bit of
Speaker 5: a hint of specifically the sectors or the companies are
Speaker 5: interested in the United States.
Speaker 4: Well, we are quite index near in how we are
Speaker 4: invested in the US. So we typically have large holdings
Speaker 4: in the you know, in the big tech companies and
Speaker 4: in all your large companies.
Speaker 2: Really and we made you know, a lot of money
Speaker 2: there over the last few years.
Speaker 4: Of course, so far this year it's been it's been negative.
Speaker 4: But when you look in comparison to the games we've
Speaker 4: had the last year and the year before, we're.
Speaker 2: Given back in a way surprisingly little.
Speaker 5: I would say, what about defensive companies like Lockheed Martin,
Speaker 5: is that going to be open for business? When it
Speaker 5: comes to the cumber Well.
Speaker 4: Fund, Well, we invest in a lot of different industries.
Speaker 4: We have less exposure to the defense industry, but we
Speaker 4: are in a lot of the defensing names as.
Speaker 3: Well, Nikolai, one word you often use with us is
Speaker 3: we are diversified. I just wonder if the meaning of
Speaker 3: that word has shifted over time, particularly this year, the
Speaker 3: treasury market is behaving in unpredictable ways. When the equity
Speaker 3: market is falling, treasury markets have fall as well. In fact,
Speaker 3: those two asset classes are training in.
Speaker 2: Lockstep at the moment.
Speaker 3: It's as if investors are treating all do dollargent on
Speaker 3: its it as it's as one bucket. And I just wondered, Nicolay,
Speaker 3: what that means for how you think about diversification this
Speaker 3: year and beyond.
Speaker 4: Yeah, there was sometimes when when this type of diversification
Speaker 4: worked less well. We had the same type of situation,
Speaker 4: you know, two three years ago, and so some years
Speaker 4: it works, some years it doesn't. I think over time,
Speaker 4: if you have a really long term time horizon, I
Speaker 4: think it's the right positioning to have.
Speaker 3: We've seen over the last month or so that some
Speaker 3: investors were trying to understand whether what was happening in
Speaker 3: the treasury market was just trades unwinding, some hedgephones, hedgephondes
Speaker 3: blowing up, or Nicolay, whether it was a reassessment of
Speaker 3: the safe haven status of the United States. Nicola I
Speaker 3: was on your dashboard to have distinguished between one and
Speaker 3: the other.
Speaker 2: What do you think it was? What do you think
Speaker 2: it is?
Speaker 4: Well, I think it's a very very complicated question. I
Speaker 4: don't think it's only one thing. I think it's a
Speaker 4: cocktail of all the kind of things you.
Speaker 2: Mentioned.
Speaker 4: Now, so far this year, we've we have been neutral
Speaker 4: to the US treasure market. We have not reduced or
Speaker 4: increased positions, so we have certainly not to cause that move.
Speaker 1: Do you have a sense, Nikolai, going forward of whether
Speaker 1: we are entering a more inflationary period given some of
Speaker 1: the deglobalization that we're seeing, some of the fissures and
Speaker 1: some of the kinks that are emerging in the supply
Speaker 1: chain system.
Speaker 4: Yeah, I think we are potentially going into a more
Speaker 4: inflationary situation. It is kind of a pretty obvious consequence
Speaker 4: of higher tariffs, and of course inflation is really negative
Speaker 4: of market, so I think that's potentially one of the
Speaker 4: big risks that we are seeing. Just Now, interestingly, we
Speaker 4: just yesterday released a podcast with Ken Rogoff, kind of
Speaker 4: the world leading specialist I guess on inflation, and he's
Speaker 4: also very worried about this particular fact.
Speaker 1: Well, I guess just to build and what John was
Speaker 1: asking about the idea of diverse vacation and you have
Speaker 1: been about neutral on US bonds. There has been a
Speaker 1: feeling that maybe diversification, especially in an inflationary environment, requires
Speaker 1: some gold, requires some alternative assets that might be act
Speaker 1: based funding, that have different streams of diversified revenues. Is
Speaker 1: that your take on it that you just on the
Speaker 1: margins want to pick up a little bit more gold
Speaker 1: or diversify a little bit more in some of these
Speaker 1: other asset classes.
Speaker 4: Yeah, So we have a very strang mannight here from
Speaker 4: the ministry, So we cannot buy gold, and I do
Speaker 4: think gold sometimes has a bit difficult to understand what
Speaker 4: the intrinsic value is of gold. We also don't do cryptocurrencies,
Speaker 4: for instance, but when we look at alternative asseids, I
Speaker 4: would say in a market like this, to have real estates,
Speaker 4: that's very good. We have just under a thousand properties
Speaker 4: around the world, you know, large holdings in Manhattan, Boston,
Speaker 4: Washington and so on, and so I think that's going
Speaker 4: to be a pretty good place to be going forward.
Speaker 2: Nikola.
Speaker 3: I appreciate your take at a difficult time. Thanks for
Speaker 3: your time this morning, Nikolay Tangen there the Norway Wealth
Speaker 3: fun CEO