Sell American technology stocks and increase holdings in Chinese stocks! The contrarian investment strategy of the $1.8 trillion sovereign wealth fund's leader.

The head of Norway's $1.8 trillion sovereign wealth fund, Nicolai Tangen, said that investors willing to go against the market in the coming months should consider selling U.S. tech stocks and private credit, while increasing their holdings in Chinese stocks. During an interview at the World Economic Forum in Davos on Wednesday, Tangen said, "What do you do today? Well, if you want to do the opposite of what everyone else is doing, sell U.S. tech stocks, buy Chinese stocks, sell private credit, buy things that are out of favor." He acknowledged that it is "very, very difficult to do because if you go against the market, against the benchmark, there will be periods of underperformance, and everyone will question your sanity," the executive said. In September 2020, the executive moved from his hedge fund AKO Capital, which he founded in 2005, to Norway's Bank Investment Management (NBIM), the formal manager of the fund. Tangen warned that inflation could continue to impact returns in the coming years. While Tangen encouraged his team to hold contrarian views, he did not disclose whether the fund was reducing its holdings in U.S. tech stocks and increasing its exposure to Chinese stocks. NBIM will release key financial data for 2024 on January 29. The executive stated that policies by the second Trump administration to reduce regulations and spur growth could be "very beneficial for our companies in the U.S.," while tariffs would have a negative impact on Europe. "Whether these policies lead to inflation is a big question, and in the long run, that will be bad news," Tangen said, noting that tightening labor markets and tariffs could be factors that push up costs. "Given the high level of government debt, investors might suddenly decide 'we want a higher interest rate to lend to governments.' So, you might see rates rise, which could be bad for financial markets." Tangen said, "What really derails markets are factors that you can't model," like financial crises, the COVID-19 pandemic, and the 2011 earthquake and tsunami in Japan. "These events happen and will happen again very quickly." The oil fund is a well-known fund in Norway and is the largest public equity single owner globally, holding shares in nearly 9000 companies worldwide. Established in the 1990s, the fund aims to invest Norway's oil wealth, primarily as an index-tracking fund, strictly operating under the authorization of the Norwegian Ministry of Finance. Under Tangen's leadership, NBIM has taken a stronger stance on environmental, social, and governance issues. These efforts include disclosing voting intentions before annual shareholder meetings and serving as a member of advisory committees for international standard-setting bodies. Tangen said on Wednesday that this focus will not disappear, despite strong opposition in the U.S. He expressed his desire to continue his role after his five-year term ends in September and added that he does not plan to pursue politics or take on other fund management roles after his term with the fund ends.