As shown in the table, the asset allocation of SOFAZ’s
investment portfolio has undergone a marked transformation between
2020 and 2025. In 2020, bonds and money market instruments
accounted for 63.8% of the portfolio, while equities made up 15.9%,
real estate 6.1%, and gold 14.2%. By 2025, these shares had shifted
to 29.8%, 25.6%, 6.4%, and 38.2%, respectively, reflecting a
significant increase in allocations to gold and real estate over
the five years.
Real estate investments, in particular, have delivered strong
financial results, generating more than $1 billion in income. These
assets play a critical diversification role within the overall
portfolio, providing both stable rental cash flows and capital
appreciation. With total returns of about 80%, real estate
investments have contributed roughly $1 billion in gains. The
portfolio now spans office, commercial, residential, industrial,
and hotel properties, comprising around 1,400 buildings located
predominantly in developed economies.
A similarly pronounced shift is evident in the Fund’s gold
holdings. One of the most notable strategic moves by SOFAZ in
recent years has been the substantial expansion of its gold
reserves. By 2025, gold holdings had risen to 200 tons,
representing a 96.5% increase compared with 2020. The rise in
gold’s share of the portfolio to 38.2% is strategically important,
serving as a hedge against geopolitical risks, a buffer against
inflationary pressures, and a tool for long-term value
preservation. At a time when global central banks are accelerating
gold purchases and prices are approaching historical highs, this
strategy has generated additional value for SOFAZ.
Date
SOFAZ’s gold reserves (tons)
2020
101,8
2021
101,8
2022
101,8
2023
101,8
2024
146,6
2025
200
These figures clearly show that the structural transformation of
SOFAZ’s portfolio is not incidental but strategic. The Fund has
decisively shifted toward an investment model that mitigates
inflation risks, enhances returns, and prioritizes long-term
stability over short-term volatility.
In recent years, SOFAZ has also stepped up its focus on
sustainable energy and infrastructure investments, reflecting a
broader alignment with global energy transition trends. This shift
became particularly evident in 2025, when the Fund gave heightened
priority to sustainability-driven and strategically important
infrastructure projects. Key additions to the portfolio during the
year included investments in ADNOC Gas Pipeline Assets in the
United Arab Emirates valued at $50 million, a 49% stake in Enfinity
Global’s 402 MW solar energy project in Italy, and an
infrastructure investment in Italo, Italy’s high-speed rail
operator.
Further reinforcing this direction, SOFAZ formalized its
intention in January to enter a long-term strategic partnership
with BlackRock, one of the world’s largest asset managers, and its
subsidiary Global Infrastructure Partners (GIP), during the World
Economic Forum in Davos. Beyond providing access to global
infrastructure funds, the partnership opens the door to investments
in infrastructure projects both within Azerbaijan and in projects
linked to the country’s broader economic interests.
Collectively, these initiatives are expected to generate stable,
predictable long-term income streams for SOFAZ while strengthening
its positioning within the global energy transition and green
economy agenda.
The Fund’s financial resilience and management quality have also
been consistently recognized by leading international credit rating
agencies. Moody’s cites the substantial volume of accumulated SOFAZ
assets as a key factor supporting Azerbaijan’s Baa3 sovereign
rating. S&P Global Ratings describes the Fund as a cornerstone
of the country’s fiscal and external buffers, while Fitch Ratings
projects sustainable growth in SOFAZ’s assets over the period from
2025 through 2027.
Taken together, these assessments underscore not only SOFAZ’s
strong financial performance but also its institutional credibility
and disciplined strategic governance.
Overall, the period from 2020 to 2025 can be characterized as
one of strategic maturity and transformation for the State Oil Fund
of the Republic of Azerbaijan. During these years, the Fund
expanded its assets to record levels, significantly diversified its
investment portfolio, preserved its role as a central pillar of
state finances, and further strengthened confidence among
international financial institutions.
Today, SOFAZ stands not merely as a national wealth fund but as
a globally recognized, modern, and sustainable sovereign investor,
one that continues to underpin Azerbaijan’s long-term economic
security for future generations.
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