Sovereign Wealth Funds
Sovereign Wealth Funds (SWFs) are pools of assets owned and managed directly or indirectly by governments to achieve national objectives. They may be funded from.
- Foreign exchange reserves
- Sale of scarce resources such as oil
- General tax and other revenues
There are a number of potential objectives of SWFs, which are not always easily attributable to a fund. Some funds may have more than one objectives. The following are some of the objectives.
- To diversify assets
- To get a better return on reserves
- To provide for pensions in the future
- To provide for future generations when natural resources are run out
- To achieve price stabilization
- To promode industrialisation; and
- To promote strategic and political objectives
The SWFs invest in both real and financial assets such as stocks, bonds, real estate, precious metals and in alternative investments such as private equity and hedge funds. Generally, they diversify their investment across multiple asset classes and across various countries. The following are some of the large SWFs and their AUM size mid of 2020.
Sovereign Wealth Fund Asset Size (as of June 2020)
| Sl No |
Name |
Assets (in USD billions) |
Country |
Inception |
| 1 |
Norway Government Pension Fund |
1,186.67 |
Norway |
1990 |
| 2 |
China Investment Corporation |
940.6 |
China |
2007 |
| 3 |
Abu Dhabi Investment Authority |
579.62 |
UAE |
1976 |
| 4 |
Kuwait Investment Authority |
533.65 |
Kuwait |
1953 |
| 5 |
Hong Kong Monetary Authority Investment Portfolio |
528.05 |
Hong Kong, China |
1993 |
| 6 |
Government of Singapore (GIC) Private Limited |
453.20 |
Singapore |
1981 |
| 7 |
SAFE Investment Company |
417.84 |
China |
1997 |
| 8 |
Temasek Holdings |
375.38 |
Singapore |
1974 |
| 9 |
Public Investment Fund |
360 |
Saudi Arabia |
2008 |
| 10 |
National Council for Social Security Fund |
325 |
China |
2000 |
| 11 |
Investment Corporation of Dubai |
320 |
UAE |
2006 |
| 12 |
Mubadala Investment Company |
226 |
UAE |
2002 |
| 13 |
Korea Investment Corporation |
134 |
South Korea |
2005 |
| 14 |
Australia Future Fund |
110 |
Australia |
2006 |
| 15 |
National Development Fund of Iran |
91 |
Iran |
2011 |
| 16 |
National Welfare Fund |
78 |
Russia |
2008 |
| 17 |
Libyan Investment Authority |
66 |
Libya |
2006 |
| 18 |
Alaksa Permanent Fund |
66 |
USA |
1976 |
END OF MY NOTES