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What is a Sovereign Wealth Fund? Here are the Top 5 Largest Sovereign Wealth Funds in the World.
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What is a Sovereign Wealth Fund? Here are the Top 5 Largest Sovereign Wealth Funds in the World. 

A sovereign wealth fund is a pool of funds owned by an individual government that aims to invest partly or wholly in foreign assets. The funds are pooled from several sources that include government budgets, central bank reserves, and trade surpluses. Among the assets that sovereign wealth funds invest in include, real estate, bonds, and stocks.

As at 2021, the total size of sovereign wealth funds stood at $10 Trillion which is an equivalent of 8% of the global GDP that was at $ 84.7 Trillion in 2020.

Sovereign Wealth Fund

The size of the Sovereign Wealth Funds is nearly twice that of all the hedge funds in the world. In 2021, the size of all hedge funds in the world stood at $ 5.13 Trillion.

Sovereign Wealth Fund
Credit: Statista

Kuwait was the first nation to start a Sovereign Wealth Fund. The fund was started in 1953. It was mainly funded by excess revenues that the country got from oil. Notably, East Asian countries such as Singapore, Hong Kong, and China would later join the practice. These countries recorded increased revenues from an export boom that had them export more than they imported. Over the years Sovereign Wealth Funds have engaged a culture of professional money management, which has served best the interests of the individual nations.

Below are the Top Five Sovereign Wealth Funds in the world;

  1. Norway’s Government Pension Fund Global with $1.3 Trillion Assets under Management (AUM)
  2. China’s China Investment Company with $1.2 Trillion AUM
  3. Kuwait’s Kuwait Investment Authority with $738 Billion AUM
  4. UAE’s Abu Dhabi Investment Authority with $708 Billion AUM
  5. Hong Kong’s Hong Kong Monetary Authority Investment Portfolio with $588.9 Billion AUM

China, UAE and Singapore have two wealth funds that rank in the top 10 list. Notably, Singapore has the sixth and seventh largest Sovereign Wealth Funds.

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