Assets of Russia’s National Wealth Fund to be invested in gold

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Assets of Russia’s National Wealth Fund to be invested in gold

Dr Tatiana Fic
Director, Central Banks and Public Policy
World Gold Council


The Russian Minister of Finance, Anton Siluanov, recently announced that 20% of the assets of the National Wealth Fund (NWF), the Russian public pension fund, will be invested in gold. Within the next couple of weeks Russia will change the structure of the NWF’s investment portfolio, entirely removing the US dollar, halving the share of the British pound and shifting to the euro, the Chinese yuan and gold.

Due to a combination of a deteriorating relationship with the US and the growth of Asia, Russia has been looking to increase its trade and finance relationships with China and the rest of the region. The asset allocation structure of the NWF reflects these changing dynamics and includes an increased role for the renminbi.

An increased allocation to gold has been part of Russia’s de-dollarisation policy for some time. The Bank of Russia acquired 1,911.7t tonnes of gold between 2006 and 2020 and, having gradually withdrawn from the USD over the last couple of years, has increased the proportion of gold in its reserves to about 23% in 2020, a level higher than that of the USD. The NWF has been reducing its dollar holdings since the beginning of the year, and now, following a change in the legislation, it will move 20% of its assets in gold – a share comparable to that in the central banks’ portfolio.1 As a result, gold, next to the EUR and the RMB, will become one of the three main assets in the NWF portfolio (Chart 1).


Chart 1. The new structure of the NWF portfolio

% of NWF assets to be allocated to gold and foreign currencies


The NWF is a part of Russia’s budget and its primary function is to co-finance private pension savings of Russian citizens. The Fund is financed from oil and gas revenues and as of 1 May its assets amounted to US$185.9 billion, equal to 12% of Russia’s GDP (Chart 2).2


Chart 2. Assets of the National Wealth Fund have trebled in the last two years

NWF assets in US$ billion

Source: Russian Ministry of Finance3


The Fund is managed by the Ministry of Finance. Based on a law adopted by the Duma in December 2020, the NWF can invest in gold via its accounts held at the Bank of Russia, with the central bank fulfilling the role of an operating agent. The NWF will invest in gold on an unallocated basis. Commenting on the NWF’s asset allocation into gold, the Governor of the Bank of Russia, Elvira Nabiulina, mentioned that the Bank of Russia takes into account the currency structure of the NWF when managing foreign exchange reserves. Currently, according to the Governor, there is no need to buy gold on the domestic market.

While this policy shift allowing the NWF to hold an allocation to gold does not represent a net increase to the gold held within Russia’s official reserves, it clearly signals a continued commitment by the Russian monetary authorities to maintain a significant holding in gold as a strategic asset.


1Given the current price of gold, a 20% share of gold in the NWF’s portfolio would be equivalent to approximately 650 tonnes of gold.

2According to the recent announcement regarding the change in the portfolio structure, a portion of the funds (up to US$5.5 billion) will also be spent to boost state investment in infrastructure projects and finance Russia’s development strategy.

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