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Mark Gilbert

The Fund That's Too Big to Scale

Norway's struggle with bond-market correlation highlights the benefits of breaking up.
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The world's biggest sovereign wealth fund is finding that size is both an asset and a liability. As Norway's fund approaches $1 trillion in assets, the question arises as to whether it's become too big for comfort as it wrestles with maintaining returns.

One of the side effects of the massive quantitative easing programs implemented by the world's central banks has been the elimination of bond-market volatility. Concurrent with that is an increase in the tendency of government bond prices to track each other more closely.