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“The positive development we’ve seen in the markets, of course, can’t last forever,” he said, referring to recent price spikes in stocks like Gamestop and Nokia after people tipped themselves on the Reddit forum.
“What we’re seeing now is a sign of the kind of risk appetite that exists. And the appetite for risk is high. You see it through situations like Spacs (special purpose acquisition companies) and individual investors, “said Nikolai Tangen.
According to the director of the Petroleum Fund, the recent rebound has been largely caused by stimulus from central banks and governments. The fund’s vice chairman, Trond Grande, told the Financial Times in August that he was concerned that strong equity markets appear to be disconnected from broader global economies, where recovery is slower.
Nikolai Tangen, who has a background as a hedge fund manager, has stated that he will try to make the fund sustainably perform better than the benchmark, causing some academics to worry that the fund will try to become a most active investor. Last year, the Petroleum Fund achieved a return of 10.9 percent, with most of the return achieved during the last quarter. The return was 0.3 percentage points higher than its benchmark.
According to Nikolai Tangen, it is difficult for the fund to radically differ from the crowd, for example in terms of exposure to the technology sector. He also said that companies like Apple, Amazon and Tesla have “gotten big for a reason.”
