Maputo, Aug. 18, 2026 (Lusa) - In the second quarter, Mozambique's Sovereign Wealth Fund (FSM) began implementing its long-term investment strategy, moving away from investments exclusively in bank deposits towards a portfolio based on international sovereign debt.
According to the Bank of Mozambique's Quarterly Investment Report, to which Lusa gained access on Tuesday, the transition took place following the approval of the Master Investment Plan by the Ministry of Finance, enabling the central bank – which has managed the fund since December – to begin allocating resources to portfolios denominated in US dollars and euros.
At the end of June, the FSM had a market value of $118.36 million (€102.9 million), divided between a US dollar-denominated portfolio, accounting for 69.99% of the total or $82.84 million (€72 million), and a portfolio denominated in euros, equivalent to 30.01% of the value, or approximately $35.52 million (€30.9 million).
The report states that the dollar portfolio was fully established, whilst the euro portfolio was in the final stages of implementation as at the report's reference date, a process which was completed on 9 July.
The geographical exposure of the investments is predominantly concentrated in the United States, reflecting the weight of the dollar-denominated portfolio, whilst the European component is spread across several Eurozone countries, including Germany, Finland, Austria, France and the Netherlands.
The Bank of Mozambique also notes that the fund complied with the main risk limits set out in the investment policy, maintaining an average credit quality in line with the benchmark indices and above the minimum required rating.
Last week, Lusa reported that the FSM's Investment Master Plan stipulates that 70% of the fund's assets are to be managed in line with the ICE BofA 0-5 Year US Treasury Index, comprising US Treasury bonds, and 30% in line with the ICE BofA 0-3 Year Euro Government Index, relating to Eurozone sovereign debt.
The document stipulates that operational management of the funds is to be carried out by the Bank of Mozambique through a strategy based on replicating the benchmark indices, allowing only limited deviations to optimise risk-adjusted returns.
Among the restrictions set out, the plan prohibits investments in assets issued by Mozambican companies or linked to the domestic economy, as well as investments with exposure to the oil and gas sector, despite the fund being financed by revenue from natural gas exploration.
The guidelines also prohibit short selling and stipulate that at least 75% of the portfolio must be invested in government bonds included in the benchmark indices. The remaining funds may be invested in low-risk instruments, including Treasury bills, fixed-term deposits, certificates of deposit, commercial paper, sovereign bonds, instruments issued by multilateral organisations and certain secured bank bonds.
The plan also sets a minimum credit rating of A- for eligible investments and limits exposure to any single issuer not included in the benchmark indices to 10% of the portfolio.
Operational costs for investment management are estimated at $73,000 (€63,000) in 2026 and $95,000 (€82,000) in 2027, covering financial platforms, information systems, custody services and benchmark index providers.
Established by Law No. 1/2024, the Mozambique Sovereign Wealth Fund is financed primarily by revenue from natural gas exploitation and aims to support economic and social development, accumulate savings for future generations and contribute to the stabilisation of the state budget.
The legislation passed by parliament stipulates that the FSM will be funded by 40% of annual revenues from natural gas extraction; the Government forecasts that these could reach around $6 billion (€5.2 billion) per year by the 2040s.
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