This is a short guide to sovereign wealth funds. For more details, please visit our main website.
There is an official definition of a sovereign wealth fund, written by sovereign wealth funds themselves in 2008 and published in Appendix I of the Santiago Principles. In short, this defines sovereign wealth funds as having three key characteristics:
- A sovereign wealth fund is owned by the general government, which includes both central government and sub-national governments.
- Includes investments in foreign financial assets.
- They invest for financial objectives.
These key elements exclude:
- Public pension funds, which are ultimately owned by the underlying policy holders.
- Central bank reserve assets, which are not invested for financial objectives, but for safety and liquidity.