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