Research/Sovereign Wealth
Divestments based on ethical grounds reduce returns of Norway’s fund
The exclusions trimmed cumulative returns on the equity index by 3.3% since 2004
BoJ unveils international investment position in 2011
Japanese central bank research paper shows a rise in country’s net assets; both external financial assets and external liabilities increase
IMF paper studies emerging market debt restructuring
Policy paper reviews causes and consequences of emerging market sovereign debt restructurings; identifies certain elements that can make process less painful
IMF paper assesses effect of transparency on credit ratings
Working paper studies relationship between fiscal transparency and sovereign credit ratings; finds that greater clarity improves a country’s rating
Sovereign wealth fund would lessen risk of Dutch disease: Bank of Israel
Excerpt from Bank of Israel’s 2010 Annual Report says establishment of a sovereign wealth fund could mitigate exchange rate risks associated with exporting natural gas
SF Fed: SWFs trump central banks on foreign investment returns
San Francisco Federal Reserve study shows central banks are more risk averse than sovereign wealth funds, producing lower average returns on investments in foreign assets
Oxford SWF Project cautions funds on aping other investors
Oxford SWF Project paper argues sovereign wealth funds’ tendency to copy strategy of other institutional investors misguided
Richmond Fed on sovereign debt dilution
A Richmond Federal Reserve study shows having a sovereign debt default program in place reduces sovereign market risk
SWFs innocent of political bias
OECD looks at whether sovereign-wealth funds’ investments are politically motivated
How to set up a sovereign wealth fund: an IMF primer
The International Monetary Fund guides on policy and operational considerations in setting up a sovereign wealth fund
Liquidity risk and sovereign risk premia
A working paper from the Bank of Canada uses arbitrage-pricing theory to study the relationship between liquidity risk and sovereign bond risk premia in the London Stock Exchange in the late 19th century.
Motivation should temper SWF fears
Examining the principal motivation for sovereign wealth funds should allay concerns such as fear of industrial espionage or geopolitical threats, states research by Deutsche Bank.
Pacific Island SWFs hampered by mismanagement
Little integration with budgets, institutional weaknesses and inadequate controls have hindered the performance of sovereign wealth funds run by the authorities in Pacific Island countries, research published by the International Monetary Fund finds.
SWF growth necessitates political action
Governments must formulate policy on sovereign wealth funds because the amount of state assets under management is likely to shoot up in coming years.