National Welfare Fund
|Russian Federation||US$ 89.6 National Welfare Fund
$149.7 Total Billion
Transparency Rating: 5*
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Firm Investment Style: Mixed
Entity Structure: Funds
Population Est.: 143.3 million – 2012
Wealth Per Capita Est.: $1,045
It consists of two funds, the reserve fund and the national welfare fund.
The reserve fund substituted the Stabilization fund of the Russian Federation. However in contrast to Stabilization fund the Reserve fund accumulates not only federal budget revenues from production and export of oil, but also revenues from production and export of natural gas and oil products. The Reserve Fund contributes to stability of the Russian Federation economic development by means of reducing inflationary pressure and insulating national economy from volatility of earnings generated by export of non-renewable natural resources. The Reserve Fund is a part of the federal budget assets. The Reserve Fund is dedicated to ensure financing of the federal budget expenses and maintaining federal budget balance in case oil and gas budget revenues decline. The maximum size of the Reserve fund is limited to 10% of the Russian Federation GDP forecasted for the corresponding fiscal year.
Before, the Oil Stabilization Fund, by law, may only be invested in foreign government bonds. It was established in January 2004.
2. National Welfare Fund
With just $32 Billion starting out, the fund could dramatically rise in if Oil Prices continue to rise. The main purpose of the fund is for the guarantee of the voluntary pensions of the citizens. In addition, to help balance the budget of the Pension Fund for the Russian Federation.
The fund is managed by the Russian Ministry of Finance. The fund has the ability to lend money to Russian banks. Furthermore the Fund is to serve as an important tool for absorbing excessive liquidity, reducing inflationary pressure and insulating the economy from volatility of oil & gas export earnings. This fund will be allowed to invest in riskier assets, such as corporate bonds and possibly equities.
Strategy & Objectives
The fund invests in conservative investments.