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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There are signs that the hedge fund industry is making a comeback, but there is a wide dispersion in growth between larger and smaller funds. In a recent paper, Peltz International said investor allocations are flowing into funds with more than $10 billion in assets under management. Yet, the opportunities for smaller funds with less Read More

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.

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

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:

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

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.

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.

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 .

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.

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.

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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