IMF Working Papers

Investment Objectives of Sovereign Wealth Funds: A Shifting Paradigm

ByIva Petrova, Jukka Pihlman, Peter J Kunzel, Yinqiu Lu

January 1, 2011

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Iva Petrova, Jukka Pihlman, Peter J Kunzel, and Yinqiu Lu. "Investment Objectives of Sovereign Wealth Funds: A Shifting Paradigm", IMF Working Papers 2011, 019 (2011), accessed 11/11/2025, https://doi.org/10.5089/9781455211968.001

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

While SWF investment objectives to some extent reflect inherent characteristics, notable differences in strategic asset allocation (SAA) exist even amongst SWFs of similar types. Even so, this paper shows that the global crisis may have changed SWF’s asset allocations in ways that may not be ideal or justified in all cases and that a review of investment objectives may be warranted. It also argues for regular macro-risk assessments for the sovereign, the continued importance of SWFs as a stabilizer in international capital markets, as well as the active role they could play in international regulatory reform.

Subject: Asset allocation, Asset and liability management, Business enterprises, Central banks, Economic sectors, Expenditure, Financial institutions, Pension spending, Reserve assets, Stocks

Keywords: asset, Asset allocation, asset-liability management consideration, Business enterprises, cross-border operation, Global, Government Policy and Regulation, investment, Investment and Risk Management, investment horizon, Pension spending, Portfolio Choice, Reserve assets, reserve investment corporation, savings SWF, savings-type SWF, sovereign wealth fund, Sovereign Wealth Funds, stabilization SWF, Stocks, SWF, SWF objective, SWF performance, SWF resource, SWF website, SWF's ability, WP

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