"SWFs are defined by the IWG as: Sovereign wealth funds (SWFs) are special purpose investment funds or arrangements that are owned by the general government."

"Sovereign wealth funds are usually distinguished based on their stated policy objectives and consequent asset allocation."

"the various governing bodies, as well as operational independence for the manager and a supervisory system with appropriate checks and balances. This is necessary in order to build legitimacy for sovereign investment, reduce risk of fraud and mismanagement, and build a competent investment organization."

"Based on IMF and the Santiago Principles taxonomy, five types of SWFs can be distinguished"

"SWFs are government-owned investment funds, set up for a variety of macroeconomic purposes. They are commonly funded by the transfer of foreign exchange assets that are invested long term, overseas."

"Sovereign Wealth Funds (SWFs) are becoming increasingly important in the international monetary and financial system, attracting growing attention."

"Exhaustibility raises issues of sustainability and intergenerational equity and calls for smoothing government consumption over time, ensuring balanced growth and avoiding the need for massive fiscal adjustment once resource wealth has been depleted."

"Resource-rich developing countries (RRDCs) face the challenges of transforming resource wealth into other assets that support sustained development, while also maintaining mechanisms to avoid the boombust cycles that stem from volatility in natural resource revenues. Their distinct characteristics—low per capita incomes, scarcity of domestic capital, and limited access to international capital markets—make advice based on traditional consumption-savings/investment theories inadequate."

"Exhaustible natural resources can offer vast opportunities for economic development. They account for a major share of export and government revenues in a rapidly growing number of resource-rich developing countries"

"requires that the government consumes each year the implicit real return on financial wealth already accumulated and the implicit return on the net present value of future resource revenues."

"The first step is creating the fiscal revenue from natural resources, as identified in the first of two IMF papers on the topic. The next, outlined in a related paper, is having in place macroeconomic policy frameworks that ensure resource revenue is well-used, and supports transforming subsoil assets into other productive assets."

"Exhaustible natural resources offer vast opportunities for economic development—but the historical record in many countries is not good."

"These papers make an important contribution to the Fund’s policy toolkit to help resource-rich developing countries better realize the resource revenue potential, and soundly manage and use these revenues"

"For countries with short time horizons before their natural resources will be depleted, the study provides a framework for assessing the long-term sustainability of fiscal policies—taking into account that resource revenues are depleting"

"that accounts for the growth and revenue-enhancing impact of public investment."

"The estimates of total wealth–including produced, natural, and human and institutional capital–suggest that human capital and the value of institutions (as measured by rule of law) constitute the largest share of wealth in virtually all countries."

"It is striking that natural capital constitutes a quarter of total wealth in low-income countries, greater than the share of produced capital."

"This suggests that better management of ecosystems and natural resources will be key to sustaining development while these countries build their infrastructure and human and institutional capital."

"This new approach to capital also provides a comprehensive measure of changes in wealth, a key indicator of sustainability"

"Growth, however, will be illusory if it is based on mining soils and depleting fisheries and forests."

"This report provides the indicators needed to manage the total portfolio of assets upon which development depends."

"With this volume, Where Is the Wealth of Nations? the World Bank publishes what could be termed the millennium capital assessment: monetary estimates of the range of assets—produced, natural, and intangible—upon which development depends."

"Savings funds are often set up by commodity-rich countries to save a portion of their resource wealth for the future. Oil, gas and precious-metal reserves are finite: one day they will run out."

"But by using their SWFs to convert today's resource wealth into renewable financial assets, governments can share the windfalls with the generations of tomorrow."

"There is also a risk that these resources will become stranded assets as climate-change regulation and the rise of green-energy alternatives render hydrocarbon extraction uneconomic."

"Some savings funds are designed to finance future liabilities. Pension reserve funds, such as Australia’s Future Fund, the New Zealand Superannuation Fund and Chile’s Pension Reserve Fund, typically invest to build capital that will help defray their sponsoring government’s future pension obligations. Unlike orthodox pension funds, the assets they manage remain the property of the government and no individual has any claim on them. As a result, these funds can remain, long-term investors, even as they are drawn upon."

"This paper discusses the main challenges faced by resource-rich nations in promoting equity; describes policy tools available for managing exhaustible natural resources; and analyzes the relationship between resource wealth and state fragility."

"It is argued that human capital accumulation, innovation, and technology diffusion can help escape the trap of low growth and resource dependence that plagues so many developing countries."

"Rather, the depletion of many types of natural resources has often mostly benefitted a handful of people from the extracting generations."

"The management of natural resource wealth to promote intergenerational equity can be achieved with fiscal frameworks designed to smooth the spending of natural resource windfalls over time."

"Because this approximation of the time to depletion does not account for the possibility of future discoveries, it provides only a basic and crude estimate for the exhaustibility of key natural resources. This is an imperfect, yet useful, starting point in assessing the urgency to transform from a resource-based economy to a more diversified economic structure."

"The Government Pension Fund Act stipulates that the State's net cash flow from the petroleum industry shall in its entirety be transferred to the Government Pension Fund Global, and that resources in the Fund can only be transferred to the budget pursuant to a decision by Parliament."

"Since 2001 the following rule has guided withdrawals from the Fund (handlingsregelen):"

"Transfers from the Fund to the central government budget shall, over time, follow the expected real return on the Fund."

"Significant emphasis is placed on evening out economic fluctuations to contribute to sound capacity utilisation and low unemployment"

"At the inception of the fiscal rule, the expected real rate of return of the Government Pension Fund Global was set at 4 percent."

"In the event of large movements in the value of the Fund or in factors that affect the structural non-oil fiscal deficit, the change in the use of petroleum revenue shall be smoothed over several years, based on an assessment of the real rate of return of the Fund a few years ahead."

"The rule stipulates that the government expenditure shall, over time, equal government revenues from the mainland economy and the expected future real return from the Fund."

"Most of the fund is invested in equities, which are ownership interests in companies. Another part is invested in bonds, which are a type of loan to governments and companies, and a final slice is invested in real estate and renewable energy infrastructure."

"When we buy fixed-income instruments, we are lending money to the issuer. During the loan period, the issuer pays us interest. The interest rate depends on factors such as inflation expectations, the maturity of the loan, and the creditworthiness of the issuer."

"In addition, investing in real estate generates annual rental income and helps shield the fund from the ups and downs of the stock market."

"We invest in renewable energy infrastructure projects to maximise the fund's return over time. It can also contribute to better diversification."

"The fund's fixed-income investments are allocated 70 percent to bonds issued by governments and related institutions and 30 percent to securities issued by the corporate sector."

"Petroleum revenues are phased into the economy gradually in accordance with the fiscal rule that over time, government spending must not use any of the fund's capital, only its expected real return – currently estimated to 3 %."

"Provided that the fiscal rule is followed, the fund's capital will not be depleted over time, and future generations will also be able to benefit from Norway's petroleum wealth."

"The fiscal rule also provides for petroleum revenue spending to be increased in economic downturns and decreased in economic upturns."

"It contributes to economic stability and predictability, which is very important for decision-makers and for society as a whole."

"Written by the 26 founding members of the International Forum of Sovereign Wealth Funds in 2008, the 24 Generally Accepted Principles and Practices, usually referred to as the 'Santiago Principles', are the globally accepted standards for governance, investment and risk management practices for sovereign wealth funds."

"The Principles are designed to promote good governance, accountability, transparency and prudent investment practices."

"Unsurprisingly, the Santiago Principles® represent a principle-based approach to governance, not a rulesbased approach."

"Since they were promulgated in Chile’s capital city in October 2008, the Santiago Principles® have become an important tool in defining a sovereign wealth fund in a range of international agreements, covering issues such as trade, international investment regulation, taxation treatment and financial-market transactions."

"The IFSWF is a diverse group of sovereign wealth funds from every inhabited continent. They have varied economic roles and mandates."

"Savings funds are often set up by commodity-rich countries to save a portion of their resource wealth for the future."

"Savings funds are sometimes referred to as intergenerational savings funds because they have decades-long investment horizons."

"Oil, gas and precious-metal reserves are finite: one day they will run out. There is also a risk that these resources will become stranded assets as climate-change regulation and the rise of green-energy alternatives render hydrocarbon extraction uneconomic."

"Much of the debate on resource management has been dominated by the permanent income hypothesis (PIH) approach, but recent work has questioned its relevance. Recent research has argued that the PIH is inappropriate in low-income countries (LICs) rich in natural resources, as it ignores that these countries are both capital and credit constrained."

"Stabilization funds often take the form of price- or revenue-contingent funds. Such funds are designed to accumulate resources when the resource price or revenue is “high” (exceeding some threshold) and to pay out when the price or revenue is “low” (falling below a second threshold). The thresholds are usually preannounced."

"The general justification for such funds is that some share of government revenues derived from the exploitation of a nonrenewable resource should be put aside for when these revenues decline, because the price of the resource has fallen, or the resource has been depleted or both."

"A country with large fiscal revenues derived from exploiting a nonrenewable resource such as oil typically faces two main problems—that the revenue stream is uncertain and volatile, and that it will eventually dry up. NRFs are sometimes proposed to deal with both these problems. First, a fund may be seen as able to stabilize budgetary revenues. When the resource price is “high/’ the fund would receive resources, which it would then pay out to the budget when the price is “low.” Second, a fund may be seen as a way to save some of the revenue generated by exploiting the finite stock of the resource, which can then provide income after it has been exhausted. Funds may also be set up for other reasons: to counteract real exchange rate volatility and “Dutch disease,” for liquidity and political economy purposes, and to enhance governance and transparency."

"According to the Santiago Principles (2008), SWFs are categorized as: (i) stabilization funds, set up to insulate the budget and economy from commodity price volatility and external shocks. Their investment horizons and liquidity objectives resemble central banks' reserve managers, in view of their role in countercyclical fiscal policies to smooth boom/bust cycles;"

"A financing fund model is an SWF that combines the characteristics of a savings fund and a stabilization fund, such as Norway and Timor-Leste."

"It is a model that is fully integrated with the government budget process. Typically, the inflows to the fund will be the resource revenues of the government in addition to the returns on the fund's investments. The outflow from the fund will be a transfer to cover the non-resource budget deficit"

"How does investment in domestic economic diversification, as a strategy, compare with alternatives such as portfolio diversification through saving a high share of resource rents abroad to invest in a range of industries—or simply slowing the rate of reserve depletion to hold more assets under the ground?"

"Another argument for diversification is to self-insure against the large macroeco- nomic shocks transmitted to countries heavily dependent on a limited range of resource exports by wide swings in resource prices."

"Still another possibility is that an exporting country might be capital constrained (van der Ploeg and Venables, 2009), with a marginal internal return to investment that is higher than the yield on foreign assets. This would argue for emphasizing domestic investment over saving abroad."

"the various governing bodies, as well as operational independence for the manager and a supervisory system with appropriate checks and balances. This is necessary in order to build legitimacy for sovereign investment, reduce risk of fraud and mismanagement, and build a competent investment organization."

"At the end of 2025, the value of the Government Pension Fund Global was 21,268 billion kroner and the fund's investments comprised 71.3 percent equities, 26.5 percent fixed income, 1.7 percent unlisted real estate and 0.4 percent unlisted renewable energy infrastructure."

"The fund is invested differently to its benchmark index along various dimensions, including asset classes, currencies, sectors, countries, regions, individual stocks and individual bond issuers."

"In 2025, investments in renewable energy infrastructure returned 18.1 percent. Offshore wind projects under construction contributed most positively. Since its inception in 2021, the strategy has produced an annual return of 4.2 percent."

"A country with large exhaustible resources such as oil can benefit substantially from them, but the revenues from exploiting these resources can pose challenges. Fiscal policymakers need to decide how expenditure can be planned and insulated from revenue shocks arising from the volatility and unpredictability of resource prices. Decisions also need to be made on the extent to which resources should be saved for future generations."

"The general justification for such funds is that some share of government revenues derived from the exploitation of a nonrenewable resource should be put aside for when these revenues decline, because the price of the resource has fallen, or the resource has been depleted or both"