Macrofinancial Linkages of the Strategic Asset Allocation of Commodity-Based Sovereign Wealth Funds
Macrofinancial Linkages of the Strategic Asset Allocation of Commodity-Based Sovereign Wealth Funds

Author: Aaron Howard Clifford Brown

Publisher: International Monetary Fund

Published: 2010-01-01

Total Pages: 33

ISBN-13: 1451961901

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This paper analyses the links between the investment strategies of a commodity-based SWF and the macroeconomic framework of the owner country. We examine some basic macrofinancial linkages of an SWF's strategic asset allocation (SAA) strategies with regard to the government budget, monetary policy, and exchange rate movements. Based on a simple Markowitz-model framework, which integrates the specific objectives and constraints facing an SWF and the country's specific characteristics and macroeconomic vulnerabilities (especially in relation to commodity prices and prospective defined liabilities), we derive an SAA. The asset-liability methodology that is applied in the selection of an SWF SAA also allows assessing whether (i) the SAA adequately takes into account the country-specific risks and vulnerabilities, and (ii) its objectives and macrofinancial constraints are consistent. Some analytical and practical issues in determining an SAA model are also discussed, along with key effects of a financial crisis.

Economics of Sovereign Wealth Funds
Economics of Sovereign Wealth Funds

Author: Mr.Udaibir S. Das

Publisher: International Monetary Fund

Published: 2010-12-09

Total Pages: 330

ISBN-13: 1589069277

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The book covers a wide range of topics of relevance to policymakers in countries that have sovereign wealth funds (SWFs) and those that receive SWF investments. Renowned experts in the field have contributed chapters. The book is organized around four themes: (1) the role and macrofinancial linkages of SWFs, (2) institutional factors, (3) investment approaches and financial markets, and (4) the postcrisis outlook. The book also discusses the challenges facing sovereign wealth funds in the coming years, from an inside perspective on countries, including Canada, Chile, China, Norway, Russia, and New Zealand. Economics of Sovereign Wealth Funds will contribute to a further understanding of the nature, strategies and behavior of SWFs and the environment in which they operate, as their importance is likely to grow in the coming years.

Investment Objectives of Sovereign Wealth Funds
Investment Objectives of Sovereign Wealth Funds

Author: Jukka Pihlman

Publisher: International Monetary Fund

Published: 2011-01-01

Total Pages: 18

ISBN-13: 1455211966

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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.

Sovereign Wealth Funds in Resource Economies
Sovereign Wealth Funds in Resource Economies

Author: Khalid Alsweilem

Publisher: Columbia University Press

Published: 2017-10-17

Total Pages: 191

ISBN-13: 0231544995

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Sovereign wealth funds (SWFs) have reached a transitional moment. Created as a way to direct excess wealth toward economic development and long-term financial returns, some countries are now seeing a decline in revenue from sources such as oil. Many SWFs are now facing a new challenge—how to spend sustainably without depleting the funds. Sovereign Wealth Funds in Resource Economies explains the fiscal rules and institutional structures that can make SWFs thrive, providing a practical and theoretical guide to their optimal use in resource-revenue management. Khalid Alsweilem and Malan Rietveld put forward an institutional perspective of SWFs as quasi-independent political and economic entities charged with managing national resource wealth, examining both investment and disbursement strategies. They advance a systematic, rule-based approach, suggesting when to accumulate and when to begin countercyclical spending based on concrete case studies. More than a mere financial portfolio, SWFs must be embedded in a credible fiscal and institutional framework if they are to contribute to improved economic performance. Alsweilem and Rietveld consider the variety of relationships that exist between SWFs and their governments, exploring the legal and policy side of the institutional approach. Their rule-based description of SWFs, since it allows tailoring and adjustment and invokes rules of thumb and best practices, is intended to be widely applicable across the diverse spectrum of global SWFs. Bringing together the practitioner perspective and scholarly expertise, this book will be invaluable for global policy makers and scholars working with sovereign wealth funds.

Sovereign Wealth Funds and Long-term Investing
Sovereign Wealth Funds and Long-term Investing

Author: Patrick Bolton

Publisher: Columbia University Press

Published: 2012

Total Pages: 254

ISBN-13: 0231158637

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Sovereign wealth funds (SWFs) are state-owned investment funds with combined asset holdings that are fast approaching four trillion dollars. Recently emerging as a major force in global financial markets, SWFs have other distinctive features besides their state-owned status: they are mainly located in developing countries and are intimately tied to energy and commodities exports, and they carry virtually no liabilities and have little redemption risk, which allows them to take a longer-term investment outlook than most other institutional investors. Edited by a Nobel laureate, a respected academic at the Columbia Business School, and a longtime international banker and asset manager, this volume examines the specificities of SWFs in greater detail and discusses the implications of their growing presence for the world economy. Based on essays delivered in 2011 at a major conference on SWFs held at Columbia University, this volume discusses the objectives and performance of SWFs, as well as their benchmarks and governance. What are the opportunities for SWFs as long-term investments? How do they fulfill their socially responsible mission? And what role can SWFs play in fostering sustainable development and greater global financial stability? These are some of the crucial questions addressed in this one-of-a-kind volume.

The New Economics of Sovereign Wealth Funds
The New Economics of Sovereign Wealth Funds

Author: Massimiliano Castelli

Publisher: John Wiley & Sons

Published: 2012-09-14

Total Pages: 245

ISBN-13: 1119973457

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A complete guide to sovereign wealth funds written by and for industry practitioners Sovereign wealth funds (SWFs) aren't new, but they are often misunderstood. As they've attracted more attention over the last decade and grown greatly in size, the need for a new and thorough resource on SWFs has never been greater. These funds will only grow more important over the coming years. In this book, expert authors who work in the industry present a comprehensive look at SWFs from the perspective of western investors.

A Practical Guide to Sovereign Wealth Funds
A Practical Guide to Sovereign Wealth Funds

Author: Adnan Hassan

Publisher: Euromoney Publications

Published: 2009

Total Pages: 212

ISBN-13:

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This much-needed practical guide covers everything you need to further your understanding of sovereign wealth funds (SWFs) - the state-owned investment funds.

Commodity-based Sovereign Wealth Funds
Commodity-based Sovereign Wealth Funds

Author: Abdullah Al-Hassan

Publisher: International Monetary Fund

Published: 2018-02-09

Total Pages: 35

ISBN-13: 1484341015

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Commodity-based sovereign wealth funds (SWFs) have been at a crossroads following the recent fall in commodity prices. This paper provides a framework for commodity-based SWF management, focusing on stabilization and savings funds, by (i) examining macrofiscal linkages for SWFs; (ii) presenting an integrated sovereign asset and liability management (SALM) approach to SWF management; and (iii) applying this framework to a scenario where assets are being accumulated and to a scenario where the SWF is drawn on to cover a financing gap due to lower commodity prices.

Sovereign Wealth Funds
Sovereign Wealth Funds

Author: Christopher Balding

Publisher: Oxford University Press, USA

Published: 2012

Total Pages: 232

ISBN-13: 0199752117

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Sovereign wealth funds are a growing and dynamic force in international finance. This is the first book to compile a history of sovereign wealth funds, recounting the Abu Dhabi Investment Authority's involvement with the scandal-plagued BCCI bank and Chinese arms exports to Iran. In a straightforward and accessible style, the author examines the complex and amazing growth of an unknown group of investors controlling trillions of dollars worldwide.