Norway's sovereign wealth fund, Government Pension Fund Global (GPFG), has significantly increased its exposure to Malaysian government bonds in the second half of 2025, according to the fund's latest disclosure.
Malaysian government bond holdings increased almost 2.5 times to $1.44 billion, compared to $580.6 million in the first half of the same year. The increase reflects a shift in investment strategy towards more stable fixed income assets in the regional market.
At the same time, holdings of bonds issued by Petroliam Nasional Bhd (PETRONAS) increased slightly to $318 million, bringing GPFG's total fixed income portfolio in Malaysia to around $1.47 billion at the end of 2025, compared to $610 million six months earlier.
In addition to bonds, the value of the fund's equity investments also increased despite a reduction in the number of companies held. GPFG ended the year with 200 shares worth $2.8 billion, compared to 209 shares worth $2.53 billion previously.
This strategy reflects a more focused approach to companies that are perceived to have higher quality and growth potential.
This change in investment strategy comes as the ringgit strengthened by more than 10% against the US dollar throughout 2025, supported by better-than-market growth in Malaysia’s economy.
Bank Negara Malaysia’s decision to keep interest rates stable has also increased the appeal of local assets as many other central banks begin to ease monetary policy.
GPFG is the world’s largest investment fund managed by the central bank of Norway, with global assets of nearly $2.1 trillion and holdings in thousands of international companies. Malaysia contributes around $3.15 billion, equivalent to about 0.2% of the fund’s total global portfolio.
In terms of sectors, GPFG’s equity portfolio in Malaysia is dominated by the financial sector, followed by industrials and technology. The fund has no investments in private property or unlisted renewable energy infrastructure in the country.
Overall, GPFG’s increased investment signals global institutional confidence in the stability of the Malaysian economy, as well as reflecting an investment strategy increasingly focused on high-quality and resilient assets in a changing global economic environment.
