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TEMPO.CO, Jakarta - Introduced by the Kuwait Investment Authority in 1953, sovereign wealth funds have been prevailing as a deployment to operate a nation’s investments. Essentially, these investments consist of national assets including stocks, bonds, real estate, and many other financial instruments.
Countries rich in resources like Saudi Arabia and Kuwait, along with nations with significant foreign exchange reserves such as China and Singapore, are among the nations with the world's largest sovereign wealth funds (SWF).
In this article, we’ll discover the top largest sovereign wealth funds in the world by assets based on the data published by Sovereign Wealth Funds Institute.
Norway, China, and Kuwait are renowned for the gigantic sum of sovereign wealth funds they currently hold. Aside from these nations, Indonesia’s Danantara reportedly aims to administer a great deal of assets, with a projection of more than US$900 billion assets in total.
Read on to see other largest wealth funds countries below.
1. Norway Government Pension Fund Global - Norway
Total Assets: US$1,738,806,263,000
The Norwegian parliament launched a program called the Government Pension Fund Global to oversee one of the world’s biggest offshore oil fields found in the country.
The initial objectives of the fund include managing revenues to avoid economic imbalances. Despite the name, this investment vehicle is attributed to a handful of values such as equities, real estate, fixed income, and renewable energy infrastructure.
Under the surveillance of the Norges Bank and the Norwegian Central Bank, the Government Pension Fund Global made gains of US$53 billion in 2017 alone. Investopedia added, major industry giants such as Royal Dutch Shell, Amazon, Microsoft, Apple, and Alphabet are among the fund’s largest equity holdings.
2. China Investment Corporation - China
Total Assets: US$1,332,071,000,000
With a mission to diversify China’s foreign exchange holdings, China Investment Corporation (CIC) was established in 2007. As the name suggests, CIC was set up to create and generate overseas investment returns, with an initial US$200 billion in capital.
Across its three subsidiaries, CIC handles various investment activities ranging from direct and fund investments, to managing bilateral and multilateral funds.
3. SAFE Investment Company - China
Total Assets: US$$1,090,000,000,000
SAFE Investment Company, also known as State Administration of Foreign Exchange, is one of the world’s current largest sovereign funds coming from China.
According to Investopedia, the fund focuses on maintaining foreign currency reserves, accumulating its assets from the budget, and trade surpluses of central bank reserves.
Much like CIC, this fund investment holds the objectives of gaining investment returns, increasing diversification of holdings, as well as reducing the country’s exposure to the U.S. dollar’s fluctuating nature.
4. Abu Dhabi Investment Authority - UAE
Total Assets: US$1,057,545,000,000
With a global reach of investment portfolios including 45-60% in North America, 15%-30% in Europe, and 10-20% in emerging markets, Abu Dhabi Investment Authority sees a bright future. The funds’ long-term returns are generated from highly diversified portfolios, from asset classes and subcategories to hedge funds, private equity, real estate, and infrastructure. Adding to its commitment to a global investment institution, the funds also cover major markets.
5. Kuwait Investment Authority - Kuwait
Total Assets: US$1,029,000,000,000
As the pioneer of sovereign wealth funds, Kuwait introduced KIA to manage the country’s reserve funds. Its primary functions include safeguarding the financial wealth of the state for the current and future generations. With a total assets of US$$1,029,000,000,000, KIA diversified the country’s revenue streams.
The global landscape of sovereign wealth funds continues to evolve, with nations leveraging these massive investment vehicles to secure financial stability and long-term growth. Understanding the influence and strategies behind these largest wealth funds in the world offers valuable insight into the future of global economic development.
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