Knowra Sovereign wealth fund Sovereign wealth fund A state-owned investment fund that manages public assets, often to earn long-term returns, stabilize public finances, or preserve wealth for future generations.
Foreign-exchange reserves : Foreign-currency assets held by a central bank or government to support payments, exchange-rate policy, and financial stability. Some sovereign funds receive assets judged unnecessary for immediate currency and liquidity needs.
Santiago Principles : A voluntary set of principles for transparency, governance, accountability, and investment practices in sovereign wealth funds. They provide a shared framework for responsible fund management across countries.
Government Pension Fund Global : Norway’s state-owned investment fund, financed chiefly by petroleum revenues and invested largely outside Norway. It is a leading example of saving resource wealth for long-term national benefit.
Dutch disease : The decline of other tradable sectors that can follow a resource boom or large capital inflow, often through currency appreciation. Investing resource revenues abroad can reduce domestic spending pressures that contribute to this effect.
Transparency and accountability : Institutional practices that make decisions visible and decision-makers answerable for their actions. Public ownership raises questions about disclosure, oversight, and who benefits from fund decisions.
Fiscal policy : Government decisions about taxation, spending, and borrowing that influence the economy and public finances. A fund’s mandate determines how investment returns and withdrawals affect public budgets.
Strategic asset allocation : The long-term division of an investment portfolio among asset classes to balance risk and return. A fund’s allocation translates its mandate and time horizon into portfolio choices.
Alaska Permanent Fund : A U.S. state fund established to invest a portion of Alaska’s mineral revenues for the state’s residents. Its dividend program directly connects investment returns with payments to residents.
Resource nationalism : Government efforts to increase national control or benefits from a country’s natural resources. A fund can convert public resource ownership into financial assets and national investment influence.
Responsible investment : Investment practices that incorporate environmental, social, and governance considerations into financial decisions. Funds must decide whether public mandates extend beyond financial returns.
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