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What is a Sovereign Wealth Fund?
What is a Sovereign Wealth Fund (SWF)?

A Sovereign Wealth Fund (SWF) is a state-owned investment fund or entity that is commonly established from:

The definition of sovereign wealth fund excludes, among other things:

Interesting Facts About Sovereign Wealth Funds
Sovereign Wealth Funds may have their origin in:
Classifications of Sovereign Wealth Funds
Traditional Classification of Sovereign Wealth Funds
Sovereign Investor Classifications
TypeMain Objectives
Central Bank or Monetary AuthorityCapital Preservation
Liquidity Sovereign InvestorInvestment Return and Liquidity
Liability Sovereign InvestorInvestment Return and Liability
Strategic Development Sovereign Wealth Funds (SDSWF)Investment Return and Economic Development
Integenerational Sovereign InvestorInvestment Return
Sovereign Wealth Funds: Nature & Purpose
Each sovereign fund has its own unique reason for its creation; furthermore, all funds have their own objectives.

Common Sovereign Wealth Fund Objectives:

Types of Sovereign Investment Vehicles:

The legal basis in which sovereign wealth funds are created varies from governmental authority and fund.

Sovereign funds generally indicate that they do not engage directly in macroeconomic policies, but with three key exceptions:

Current Trends – Sovereign Wealth Funds
Size and Growth

Generally speaking, as other countries grow their currency reserves they will seek to diversify reserve portfolios and generate greater returns. Between the years of 2003 to 2013, sovereign wealth fund assets have skyrocketed by rising commodity prices greatly attributable to oil & gas.

Since 2005, at least 40 sovereign wealth funds have been created.
Sovereign Wealth Fund Assets Under Management (AUM) Values by Year
Transparency & Protectionsim

Some sovereign wealth funds are not as transparent as others. For example, one sovereign wealth fund may disclose their investment holdings in a periodic basis, while another fund keeps them private. Since 2008, sovereign wealth funds have taken strides to be more transparent, hoping to dispel fears of protectionism.

Learn more about the Linaburg Maduell Transparency Index.

Sovereign Wealth Enterprise (SWE)

Sovereign wealth enterprises (SWE) are investment vehicles that are owned and controlled by sovereign wealth funds. These subsidiaries or vehicles allow greater flexibility for sovereign funds.

Strategic Development Sovereign Wealth Fund (SDSWF)

It is a sovereign wealth fund that can be utilized to promote national economic or development goals. It is commonly accepted that most sovereign funds have a commercial objective which is to earn a positive risk-adjusted return on their pool of assets. There are some sovereign funds known to promote national economic or development goals.

Did you know?
From the start of 2008 until the end of 2012, sovereign wealth fund assets grew by 59.1%
From 2005 to 2012, more than 32 sovereign wealth funds were created.
Key Sovereign Wealth Fund Resources
Common List of Abbreviations
AbbreviationFull Name
ADIAAbu Dhabi Investment Authority
ADICAbu Dhabi Investment Council
CalPERSCalifornia Public Employees Retirement System
CICChina Investment Corporation
GCCGulf Cooperation Council
GIC Singapore's Government Investment Corporation
GPFGNorway's Government Pension Fund – Global
HSFTrinidad and Tobago – Heritage and Stabilization Fund
KIA Kuwait Investment Authority
KICKorea Investment Corporation
LIALibyan Investment Authority
LMTILinaburg Maduell Transparency Index
NWFNational Welfare Fund (Russia)
QIAQatar Investment Authority
RDIFRussian Direct Investment Fund
SAFEState Administration of Foreign Exchange (China)
SAMASaudi Arabian Monetary Agency
SDSWFStrategic Development Sovereign Wealth Fund
SIFStrategic Investment Fund (France)
SOEState-Owned Enterprise
SWE Sovereign Wealth Enterprise
SWFSovereign Wealth Fund