Pension funds, sell your oil & gas stock
Last month, Norway’s $1 trillion pension fund announced plans to drop oil and gas stocks from its core benchmark stock portfolio. The move was of note because it served as an important acknowledgement by a major institutional investor that such holdings have lost their status as mainstream, blue-chip investments and are now considered speculative.
It carries special significance too because the Norwegians really know the oil and gas market. The country owns vast oil reserves and the government — and the huge fund itself — are highly dependent on revenues from North Sea oil.
New York City’s five pension funds, which are worth $186 billion, would do well to follow Norway’s example. The city’s fund managers have been slow to recognize the rising risk in oil and gas stock, which are no longer the investment they once were and which expose the funds to potential losses they can ill afford.
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