* Share of stocks rises to 63.4 pct from 62.4 pct in Q1
* Sharply cuts UK government bond holdings, raises Japan
* Sets up Corporate Governance Advisory Board
OSLO, Aug 9 (Reuters) - Norway's $760 billion oil fund, the world's biggest investor, increased its holdings of stocks in the second quarter, sharply reduced its British bond holdings and picked up more Japanese government debt.
The fund, which invests Norway's vast surplus oil money, raised the share of equity holdings to 63.4 percent from 62.4 in Q1, marking an almost 4 percentage point jump from a year earlier, on expectation for accelerating growth in the United States.
"Equity returns were boosted by strong markets in the U.S. and Japan, while emerging markets pulled in the other direction," Yngve Slyngstad, the fund's chief executive, said on Friday. "Fixed-income returns were undermined by a rise in global yields."
Among the biggest changes in its portfolio, the fund cut its British government debt holdings by 26 percent to 42.9 billion crowns ($7.26 billion) and increased its Japanese government bond holdings by 30 percent to 129.5 billion crowns.
Nestle remained the fund's biggest equity holding with a stake worth 38.2 billion crowns while Royal Dutch Shell moved to second place from third with 28.6 billion.
To increase its clout as a major investor, the fund also said it was establishing a Corporate Governance Advisory Board, seeking advise on active ownership and input on board nomination practices.
The fund returned 0.1 percent in the second quarter, beating its own benchmark index by 0.3 percentage points, as fixed income investments returned -1.4 percent and equities returned 0.9 percent.
The fund, worth about $150,000 for each of Norway's 5.1 million residents, holds about 1 percent of all global equities.