OREANDA-NEWS. On July 30, 2008 The instability on the financial markets has caused the Ministry of Finance (Minfin) to give preference to investments into such conservative assets as bonds when placing the funds of the Reserve Fund and the National Welfare Fund.

"Minfin is still a conservative investor, and revenue from placement of the Reserve Fund and the National Welfare Fund's assets depends on investments into foreign countries' bonds and similar assets. Given the instability on the financial markets, this strategy should pave its way", the head of Minfin's department of international financial relationships, state debt and state financial assets, Petr Kazakevich said.

"In 1Q 08, the profitability of the Russian funds amounted to 6.5% per annum in US dollar terms", the Minfin spokesperson said. "In my view, there is only one conclusion: we should diversify the investments of Russian sovereign funds in order boost the return on investments, we should be cautions and always remember that both funds are very important for the country: the Reserve Fund ensures fulfillment of credit liabilities by the state, including social liabilities, while the National Welfare Funds ensures financial stability of the country's pension system", Kazakevich summed up.