Dividends and Norway’s wealth fund reduces oil exposure

Of all the countries in the world with access to revenues from oil, the country of Norway has likely done the most to help its everyday citizens. In the North Sea, there are still billions of oil barrels being drilled and at times the weather is very rough. In Norway, when these billions of dollars were flowing into the treasury, the government set up a sovereign fund or wealth fund and Norway’s fund is in the trillion dollar range. This means for everyone who lives in Norway, there are many free public institutions such as education, medicine, social security or the fund interest and dividends pay for many government services.

Similarly to every other country on earth, climate concerns are a big issue and the Norway wealth und has decided to gradually sell $8 billion in shares of exploration and production companies but keeps its $29 billion holdings in integrated firms that have both production and refining.

According to the article written by Shawn McCarthy of the Globe and Mail, two years ago, the fund sold off most of its shares in coal companies. While, the President Trump was talking about how coal was coming back, the fund sold off its holdings. For all funds which have exposure to oil and gas, it is hard to sell many of them because they are profitable companies which also pay dividends. In addition some of the chemical companies which use petrochemicals in their products are hard to sell because they rank high in profitability.

Linking to dividend paying stocks, as an individual choices can be made that are seeming black and white and it is relatively easy to stay away from companies you do not like. In investing, if you do not like them, use the money for better good. As you evaluate good long term companies, non are them are perfect, the use of petrochemicals in our society is hard not to invest in.

There are more questions than answers, till the next time – to raising questions.

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