Norway $600 billion oil fund sells more euro zone debt

OSLO (Reuters) - Norway's $600 billion sovereign wealth fund continued to decrease its exposure to the troubled euro zone in the second quarter, picking up U.S., Japanese and emerging markets bonds instead, it said on Friday.

The fund, one of the world's biggest investors, also reduced its exposure to stocks, raising the share taken by its fixed income portfolio as it grew more risk-averse amid turbulence in financial markets, the fund said in a quarterly report.

"The fund in the quarter increased investments in U.S., German and Japanese government bonds. It (also) boosted holdings of government bonds issued in the currencies of emerging markets such as China, Brazil and India," it said.

The fund, which holds $120,000 for each of Norway's 5 million residents, has reached its quota for investment in China as fixed by the Chinese government but said it was keen to invest further in the country.

"We will increase our investment in Chinese A shares when this ceiling is raised," Yngve Slyngstad, the fund's chief executive, told a news conference.

Holdings of British, French and Italian government debt decreased. The fund had already got rid of its Portuguese and Irish government bonds in the first quarter.

The oil fund, which manages Norway's surplus oil revenues, said its Italian and Spanish government bond holdings were worth 36.3 billion crowns ($6.13 billion) at the end of the quarter, while its exposure to Greece was almost nil.

Slyngstad said the fund picked up shares in Facebook (FB.O) and holds around 0.1 percent of the company. This figure is likely to increase closer to the firm's index weighting over time, he added. ($1 = 5.9218 Norwegian krones)

(Reporting by Vegard Botterli and Balazs Koranyi; Editing by Catherine Evans)