Sovereignfunds are defined as state-owned investment funds or entities. Their ultimate purpose is to invest a country’s money in a way that reaps fiscal benefits for its citizens in the long run. Traditionally, many of the largest funds were created on the back of petrodollars. As the price of oil plummets, sovereign funds begin to play tremendously important roles in petroleum-fuelled .
According to the Sovereign Wealth Fund Institute (SWFI), the 40 existing sovereignfunds in the world collectively control $7 trillion, with over half of that amount coming from oil revenues.
Our list of the top 10 largest sovereignfunds from around the world
10. National Social Security Fund
Amount: $249.6 billion
The National Social Security Fund is just one of four sovereignfunds in . Its primary role is to create for the nation’s social security and is managed by the National Council for Social Security Fund (SSF).
In 2014, the fund based nearly half of its investments in fixed-income assets. Around a third of its investments were made in domestic stocks, while oversea stocks were at 8.28%, industrial investments at 13.65%, and cash investments a mere 0.96%.
9. Qatar Investment Authority
Amount: $256 billion
The Qatar Investment Authority was created to manage the surplus income from the tiny nation’s disproportionately huge oil and natural gas industry. It has since reverted its focus from the energy sector and is now active in diversified foreign and domestic investments.
The bulk of the QIA’s investments are made outside the country. It invests in a number of financial instruments such as equities, credit and fixed income securities,, and . The fund owns a real estate company called Qatari Diar. It owns shares in major around the world, including Barclays, , and Porche.
8. Government of Singapore Investment Corporation
Amount: $344 billion
The Government of Singapore Investment Corporation is tasked with managing the money of the Singaporean government and the Monetary Authority of. The fund is comprised of the country’s foreign reserves. It was instituted by the first Deputy Prime Minister Goh Keng Swee for the future and welfare of the nation’s people.
The fund is comprised of two parts: the Reference portfolio and the Policy and Active portfolio. The Reference portfolio is passive and is made up of 65% global equities and 35% global bonds. The P&A portfolio has two active portfolios, with the Policy portfolio allocated among six asset classes and based on long-term returns. The Active portfolio seeks to outperform it. The bulk of the fund’s portfolio is invested largely in North and, with the remainder split almost equally between and .
7.Monetary Authority Investment Portfolio
Amount: $417.9 billion
TheMonetary Authority Investment Portfolio’s Exchange Fund was originally established in 1935 through a merger of the Office of the Exchange Fund and the Commissioner of Banking.
The Exchange Fund is broken into three parts: the backing portfolio, the investment portfolio, and the strategic portfolio. The fund also invests in a wide range of currencies and instruments. Its makeup is 75% bonds and 25% equities.
6. SAFE Investment Company
Amount: $547 billion
The SAFE Investment Company is aof the Chinese State Administration of Foreign Exchange, which manages the country’s foreign exchange reserves.
Although the fund’s total amount is publically known, its specific investments are not as clearly revealed. It is understood that the fund invests in a wide variety of areas, including foreign and domestic equities, as well as fixed income securities.
Amount: $592 billion
As with many other petroleum-based, the Investment Authority is a fund for the surplus oil . It is also the world’s first, thus oldest, sovereign fund. In 1982, it officially became an autonomous governmental body managing the assets of the country. In 1982, it officially became an autonomous governmental body managing the assets of the country.
The fund is largely split between two separate funds, the General Reserve Fund and the Future Generations Fund. The fund generally shies away from obtaining a majority or controlling interests in a, with the exception of real estate and investment holding companies.
4. SAMA Foreign Holdings
Amount: $668.6 billion
SAMA Foreign Holdings is controlled by theArabian Monetary Agency, the nation’s central bank that was established in 1952. The fund receives the bulk of its from ’s massive oil industry, and it manages a number of public pensions.
The fund is secretive about its investments, but it is largely understood to channel funds into conservative asset classes such as bank deposits and US Treasury bonds. It also reportedly looks to the Norwegian sovereign wealth fund as a role model.
3. China Investment Corporation
Amount: $746.7 billion
The China Investment Corporation is a wholly state-ownedthat gains its from managing a part of ’s foreign exchange reserves. As of 2015, the foreign exchange reserves of stood at $ 3.65 trillion, making it the largest foreign exchange reserve in the world.
The CIC invests nearly half of its funds in public equities, with just over a quarter of the money channeled into long-term investments. Almost half of its public equity investments are made in the US while a third of it is invested in non-US advanced. The CIC’s investment decisions are made based on a three-layer asset allocation framework: strategic asset allocation, policy portfolio, and tactical asset allocation.
Amount: $773 billion
TheInvestment Authority receives the majority of it’s funding from the National Oil Company and its . 70% of the payments into the fund are sent to the ADIA while the remaining 30% is sent to its sister fund, the Investment Council. Though the fund is owned by the government of the , it is kept at arms length and run by its own governing body.
The ADIA invests in a wide spectrum of assets and regions. The largest portion of the fund invests inequities, followed by equities and government bonds. It also invests heavily in , while dividing up the rest of its investments in and .
1. Government Pension Fund – Global
Amount: $882 billion
This Norwegian wealth fund was created to pool the surplus profits gained from the Norwegian petroleum industry. It was known until 2006 as the Petroleum Fund of Norway. Despite being called a pension fund, it does not derive its backing from pensioners, but rather oil profits.
The fund is managed by the Norges Bank Investment Management company, with the understanding that its purpose is to support the country in post-oil times. It has been used to invest in over 9,000 companies in 75 countries with most of these investments made equally betweenand . Their investments are largely in , but a third is in fixed-income and a very small percent in .