Visualizing The World's Largest Sovereign Wealth Funds| MENAFN.COM

Sunday, 22 May 2022 10:30 GMT

Visualizing The World's Largest Sovereign Wealth Funds


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Did you know that some of the world's largest investment funds are owned by national governments?

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Known as sovereign wealth funds (SWF) , these vehicles are often established with seed money that is generated by government-owned industries. If managed responsibly and given a long enough timeframe, an SWF can accumulate an enormous amount of assets.

In this infographic, we've detailed the world's 10 largest SWFs, along with the largest mutual fund and ETF for context.

Table of Contents show
  • 1. The Big Picture
  • 2. The Trillion Dollar Club
  • 3. Preparing for a Future Without Oil
The Big Picture

Data collected from SWFI in October 2021 ranks Norway's Government Pension Fund Global (also known as the Norwegian Oil Fund) as the world's largest SWF.

The world's 10 largest sovereign wealth funds (with fund size benchmarks) are listed below:

Country Fund Name Fund Type Assets Under Management (AUM)
Norway Government Pension Fund Global SWF $1.3 trillion
U.S. Vanguard Total Stock Market Index Fund Mutual fund $1.3 trillion
China China Investment Corporation SWF $1.2 trillion
Kuwait Kuwait Investment Authority SWF $693 billion
United Arab Emirates Abu Dhabi Investment Authority SWF $649 billion
Hong Kong SAR Hong Kong Monetary Authority Investment Portfolio SWF $581 billion
Singapore Government of Singapore Investment Corporation SWF $545 billion
Singapore Temasek SWF $484 billion
China National Council for Social Security Fund SWF $447 billion
Saudi Arabia Public Investment Fund of Saudi Arabia SWF $430 billion
U.S. State Street SPDR S&P 500 ETF Trust ETF $391 billion
United Arab Emirates Investment Corporation of Dubai SWF $302 billion

SWF AUM gathered on 10/08/2021. VTSAX and SPY AUM as of 09/30/2021.

So far, just two SWFs have surpassed the $1 trillion milestone. To put this in perspective, consider that the world's largest mutual fund, the Vanguard Total Stock Market Index Fund (VTSAX) , is a similar size, investing in U.S. large-, mid-, and small-cap equities.

The Trillion Dollar Club

The world's two largest sovereign wealth funds have a combined $2.5 trillion in assets. Here's a closer look at their underlying portfolios.

  • Government Pension Fund Global – $1.3 Trillion (Norway)
  • Norway's SWF was established after the country discovered oil in the North Sea. The fund invests the revenue coming from this sector to safeguard the future of the national economy. Here's a breakdown of its investments.

    Asset Class % of Total Assets Country Diversification Number of Securities
    Public Equities 72.8% 69 countries 9,123 companies
    Fixed income 24.7% 45 countries 1,245 bonds
    Real estate 2.5% 14 countries 867 properties

    As of 12/31/2020

    Real estate may be a small part of the portfolio , but it's an important component for diversification (real estate is less correlated to the stock market) and generating income. Here are some U.S. office towers that the fund has an ownership stake in.

    Address Ownership Stake
    601 Lexington Avenue, New York, NY 45.0%
    475 Fifth Avenue, New York, NY 49.9%
    33 Arch Street, Boston, MA 49.9%
    100 First Street, San Francisco, CA 44.0%

    As of 12/31/2020

    Overall, the fund has investments in 462 properties in the U.S. for a total value of $14.9 billion .

  • China Investment Corporation (CIC) – $1.2 Trillion (China)
  • The CIC is the largest of several Chinese SWFs, and was established to diversify the country's foreign exchange holdings.

    Compared to the Norwegian fund, the CIC invests in a greater variety of alternatives. This includes real estate, of course, but also private equity , private credit, and hedge funds.

    Asset Class % of Total Assets
    Public equities 38%
    Fixed income 17%
    Alternative assets 43%
    Cash 2%

    As of 12/31/2020

    A primary focus of the CIC has been to increase its exposure to American infrastructure and manufacturing. By the end of 2020, 57% of the fund was invested in the United States.

    This has drawn suspicion from U.S. regulators given the geopolitical tensions between the two countries. For further reading on the topic, consider this 2017 paper by the United States-China Economic and Security Review Commission.

    Preparing for a Future Without Oil

    Many of the countries associated with these SWFs are known for their robust fossil fuel industries. This includes Middle Eastern nations like Kuwait, Saudi Arabia, and the United Arab Emirates.

    Oil has been an incredible source of wealth for these countries, but it's unlikely to last forever. Some analysts believe that we could even see peak oil demand before 2030 —though this doesn't mean that oil will stop being an important resource .

    Regardless, oil-producing countries are looking to hedge their reliance on fossil fuels. Their SWFs play an important role by taking oil revenue and investing it to generate returns and/or bolster other sectors of the economy.

    An example of this is Saudi Arabia's Public Investment Fund (PIF), which supports the country's Vision 2030 framework by investing in clean energy and other promising sectors.

    Article by Visual Capitalist

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