Saudi Arabia Boosts ETFs, Drops Shares in Boeing, Facebook, and Disney

The Public Investment Fund of Saudi Arabia continued to diversify its investment portfolio away from oil and fuel energy in Q2, 2020, the latest SEC filing has revealed.

Saudi’s Public Investment Fund Continues to Diversify Portfolio

Saudi Arabia’s investment arm, the sovereign wealth-fund, has begun thinning some of its investments in the world’s biggest companies. Instead, the sovereign fund is refocusing efforts on exchange-traded funds, a filing to the Securities and Exchange Commission (SEC) revealed.

The makeup of the most recent investment has focused on increasing diversification in the second quarter of 2020, and adding more low-cost basket of stocks such as ETFs. According to the 13F filing, the fund purchased real-estate and utility ETFs in Q1.

Based on the information publicly available on SEC’s official website, the Public Investment Fund (PIF) holds $300 billion of total assets with $4.65 billion invested in ETFs in the United States between Q1 and Q2. To date, the fund has invested estimated $1.86 billion into The Utilities Select Sector SPDR Fund and allocated another significant investment worth $2.79 billion into The Real Estate Select Sector SPDR Fund.

Lightening Up the Portfolio a Little

Shifting investment efforts has come with an increased presence in US ETFs, estimated at $10 billion presently. PIF also ditched shares in international entities, such as Boeing, Marriot International, Walt Disney and Facebook, including 210,222 shares in Berkshire Hathaway, owned by Warren Buffet. Boeing and Disney’s assets were bought in April, 2020, at the height of the pandemic.

According to the SEC filing, PIF held over $520 million in Facebook and $495 million in Disney. Meanwhile, the kingdom has been actively trying to pull away from its dependence on oil and diversify its investment portfolio at the behest of Mohammed bin Salman, the Crown Prince.

PIF unloaded shares in Shell, BP, Total as well as American banks Citigroup and Bank of America. A little counter-intuitively, the fund invested in Carnival, a cruise operator and Live Nation Entertainment, a promoter of live events.

Meanwhile, Saudi Arabia’s exports fell by $12 billion due to record low prices. Presently, 77% of the country’s total revenue is based on oil exports.