A Sovereign Wealth Fund is a state-owned investment fund comprising financial assets such as stocks, bonds, real estate or other instruments and funded by foreign exchange assets.

Author: Tiziana Barghini

In the latest 2015 ranking, Norway’s Government Pension Fund–Global with assets for $824.9 billion, ranks first, followed by the Abu Dhabi Investment Authority with US$773 billion. Both funds are financed via oil revenue.

Sovereign wealth funds (SWFs) are managed separately from official currency reserves. They are pools of money governments use to generate profits. Often this money is invested in foreign companies. Their assets can include balance-of-payments surpluses, official foreign currency operations, proceeds of privatizations, fiscal surpluses and/or receipts resulting from commodity exports.

They can be structured as a fund, pool or corporation. They do not include foreign currency reserve assets held by monetary authorities for the traditional balance-of-payments or monetary policy purposes, state-owned enterprises (SOEs) in the traditional sense, government-employee pension funds or assets managed for the benefit of individuals.

SWFs may originally be created to reduce the volatility of government revenues, to counter the adverse effects of volatility in financial cycles on government spending and the national economy, or to build up savings for future generations.

Country Sovereign Wealth Assets USD-Bil Inception Origin
Norway Government Pension Fund – Global 824.9 1990 Oil
UAE – Abu Dhabi Abu Dhabi Investment Authority 773 1976 Oil
China China Investment Corporation 746.7 2007 Non-Commodity
Saudi Arabia SAMA Foreign Holdings 668.6 n/a Oil
Kuwait Kuwait Investment Authority 592 1953 Oil
China SAFE Investment Company 547** 1997 Non-Commodity
China – Hong Kong Hong Kong Monetary Authority Investment Portfolio 417.9 1993 Non-Commodity
Singapore Government of Singapore Investment Corporation 344 1981 Non-Commodity
Qatar Qatar Investment Authority 256 2005 Oil & Gas
China National Social Security Fund 236 2000 Non-Commodity
Singapore Temasek Holdings 193.6 1974 Non-Commodity
UAE – Dubai Investment Corporation of Dubai 183 2006 Non-Commodity
UAE – Abu Dhabi Abu Dhabi Investment Council 110 2007 Oil
Australia Australian Future Fund 95 2006 Non-Commodity
South Korea Korea Investment Corporation 84.7 2005 Non-Commodity
Kazakhstan Samruk-Kazyna JSC 77.5 2008 Non-Commodity
Kazakhstan Kazakhstan National Fund 77 2000 Oil
Russia National Welfare Fund 73.5 2008 Oil
UAE – Abu Dhabi International Petroleum Investment Company 66.3 1984 Oil
UAE – Abu Dhabi Mubadala Development Company 66.3 2002 Oil
Libya Libyan Investment Authority 66 2006 Oil
Russia Reserve Fund 65.7 2008 Oil
Iran National Development Fund of Iran 62 2011 Oil & Gas
US – Alaska Alaska Permanent Fund 53.9 1976 Oil
Algeria Revenue Regulation Fund 50 2000 Oil & Gas
Malaysia Khazanah Nasional 41.6 1993 Non-Commodity
Brunei Brunei Investment Agency 40 1983 Oil
US – Texas Texas Permanent School Fund 37.7 1854 Oil & Other
Azerbaijan State Oil Fund 37.3 1999 Oil
France Strategic Investment Fund 25.5 2008 Non-Commodity
Ireland Ireland Strategic Investment Fund 23.5 2001 Non-Commodity
New Zealand New Zealand Superannuation Fund 20.2 2003 Non-Commodity
US – New Mexico New Mexico State Investment Council 19.8 1958 Oil & Gas
Canada Alberta’s Heritage Fund 17.5 1976 Oil
US – Texas Permanent University Fund 17.2 1876 Oil & Gas
East Timor Timor-Leste Petroleum Fund 16.9 2005 Oil & Gas
Chile Social and Economic Stabilization Fund 15.2 2007 Copper
UAE – Federal Emirates Investment Authority 15 2007 Oil
Russia Russian Direct Investment Fund 13 2011 Non-Commodity
Oman State General Reserve Fund 13 1980 Oil & Gas
Bahrain Mumtalakat Holding Company 11.1 2006 Non-Commodity
Peru Fiscal Stabilization Fund 9.2 1999 Non-Commodity
Chile Pension Reserve Fund 7.9 2006 Copper
Mexico Oil Revenues Stabilization Fund of Mexico 6 2000 Oil
Oman Oman Investment Fund 6 2006 Oil
Italy Italian Strategic Fund 6 2011 Non-Commodity
Botswana Pula Fund 5.7 1994 Diamonds & Minerals
US – Wyoming Permanent Wyoming Mineral Trust Fund 5.6 1974 Minerals
Trinidad & Tobago Heritage and Stabilization Fund 5.5 2000 Oil
Brazil Sovereign Fund of Brazil 5.3 2008 Non-Commodity
Saudi Arabia Public Investment Fund 5.3 2008 Oil
China China-Africa Development Fund 5 2007 Non-Commodity
Angola Fundo Soberano de Angola 5 2012 Oil
US – North Dakota North Dakota Legacy Fund 3.2 2011 Oil & Gas
US – Alabama Alabama Trust Fund 2.5 1985 Oil & Gas
Kazakhstan National Investment Corporation 2 2012 Oil
Nigeria – Bayelsa Bayelsa Development and Investment Corporation 1.5 2012 Non-Commodity
Nigeria Nigerian Sovereign Investment Authority 1.4 2012 Oil
US – Louisiana Louisiana Education Quality Trust Fund 1.3 1986 Oil & Gas
Panama Fondo de Ahorro de Panamá 1.2 2012 Non-Commodity
UAE – Ras Al Khaimah RAK Investment Authority 1.2 2005 Oil
Bolivia FINPRO 1.2 2012 Non-Commodity
Senegal Senegal FONSIS 1 2012 Non-Commodity
Iraq Development Fund for Iraq 0.9 2003 Oil
Palestine Palestine Investment Fund 0.8 2003 Non-Commodity
Venezuela FEM 0.8 1998 Oil
Kiribati Revenue Equalization Reserve Fund 0.6 1956 Phosphates
Vietnam State Capital Investment Corporation 0.5 2006 Non-Commodity
Gabon Gabon Sovereign Wealth Fund 0.4 1998 Oil
Ghana Ghana Petroleum Funds 0.45 2011 Oil
Indonesia Government Investment Unit 0.3 2006 Non-Commodity
Mauritania National Fund for Hydrocarbon Reserves 0.3 2006 Oil & Gas
Australia Western Australian Future Fund 0.3 2012 Minerals
Mongolia Fiscal Stability Fund 0.3 2011 Minerals
Equatorial Guinea Fund for Future Generations 0.08 2002 Oil
Papua New Guinea Papua New Guinea Sovereign Wealth Fund n/a 2011 Gas
Turkmenistan Turkmenistan Stabilization Fund n/a 2008 Oil & Gas
US – West Virginia West Virginia Future Fund n/a 2014 Oil & Gas
Mexico Fondo Mexicano del Petroleo n/a 2014 Oil & Gas
Total Oil & Gas Related: $4,057.70
Total Other: $3,127.90
TOTAL: $7,185.60

SWFs usually invest globally, although some also invest indirectly in domestic state-owned enterprises. In addition, they tend to prefer returns over liquidity and thus have a higher risk tolerance than traditional foreign exchange reserves. After some SWFs made bad investments in Wall Street financial firms prior to the 2007-2008 financial crisis, there is some evidence – and much speculation – that SWFs may dial back somewhat on their risk tolerance.

Although a few funds were created before 2000, the number of sovereign wealth funds has increased dramatically only in the last 14 years.

Critics of SWFs point out that as this asset pool continues to expand in size and importance, so does its potential impact on various markets. In addition, foreign investment by SWFs raises some national security concerns because of speculation that the purpose of the investment might be to secure control of strategically important industries for political rather than financial gain. Moreover, the lack of transparency for some of the funds – that is, size and source of funds, investment goals, internal checks and balances, disclosure of relationships and holdings in private equity funds – has been another cause for concern by investors and regulators. The International Monetary Fund’s Santiago Principles have tried to address these concerns.


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