The current 54 percent of Norway's so-called oil fund — one of the biggest sovereign wealth funds in the world — invested in European stocks and bonds will drop to 41 percent, the government said in a report to parliament on the long-term changes in the management of the fund.

"The proportion invested in Europe will be reduced gradually over time," Finance Minister Sigbjørn Johnsen said in a statement.

At the same time, "the fund is growing, so that its (European) investments measured in Norwegian kroner will still increase over time," Johnsen said, adding "the fund shall continue to be a considerable investor in Europe."

The Norwegian oil fund, which contains all state revenues from the country's massive oil and gas sector, is currently valued at around 3,470 billion kroner ($609.2 billion) and is Europe's biggest
investor.

Parallel with the relative reduction in European stocks and bonds, the fund will increase its investments in the Americas and in Africa from 35 to about 40 percent of its total portfolio, while its portion of Asian investments will rise from 11 to 19 percent.

"We want a broad diversification of the investments, in accordance with the actual production capacity in different parts of the world," finance ministry state secretary Hilde Singsaas told the Dow Jones Newswires.

The Norwegian fund was created in the beginning of the 1990s to help finance Norway's generous welfare state system once the oil wells run dry, and is invested in equities and bonds, as well as real estate.

The government is not authorised to use more than four percent of its holdings each year to balance its budget.

Without the cash injection from the fund, the budget would be in the red and the current centre-left government has balked at a central bank recommendation to lower the spending ceiling.