Visualized: The World’s Largest Sovereign Wealth Funds

Did you know that some of the world’s largest investment funds are owned by national governments?

Known as sovereign wealth funds (SWF), these vehicles are often established with seed money that is generated by government-owned industries. If managed responsibly and given a long enough timeframe, an SWF can accumulate an enormous amount of assets.

In this infographic, we’ve detailed the world’s 10 largest SWFs, along with the largest mutual fund and ETF for context.

The Big Picture

Data collected from SWFI in October 2021 ranks Norway’s Government Pension Fund Global (also known as the Norwegian Oil Fund) as the world’s largest SWF.

The world’s 10 largest sovereign wealth funds (with fund size benchmarks) are listed below:

SWF AUM gathered on 10/08/2021. VTSAX and SPY AUM as of 09/30/2021.

So far, just two SWFs have surpassed the $1 trillion milestone. To put this in perspective, consider that the world’s largest mutual fund, the Vanguard Total Stock Market Index Fund (VTSAX), is a similar size, investing in U.S. large-, mid-, and small-cap equities.

The Trillion Dollar Club

The world’s two largest sovereign wealth funds have a combined $2.5 trillion in assets. Here’s a closer look at their underlying portfolios.

1. Government Pension Fund Global – $1.3 Trillion (Norway)

Norway’s SWF was established after the country discovered oil in the North Sea. The fund invests the revenue coming from this sector to safeguard the future of the national economy. Here’s a breakdown of its investments.

As of 12/31/2020

Real estate may be a small part of the portfolio, but it’s an important component for diversification (real estate is less correlated to the stock market) and generating income. Here are some U.S. office towers that the fund has an ownership stake in.

As of 12/31/2020

Overall, the fund has investments in 462 properties in the U.S. for a total value of $14.9 billion.

2. China Investment Corporation (CIC) – $1.2 Trillion (China)

The CIC is the largest of several Chinese SWFs, and was established to diversify the country’s foreign exchange holdings.

Compared to the Norwegian fund, the CIC invests in a greater variety of alternatives. This includes real estate, of course, but also private equity, private credit, and hedge funds.

As of 12/31/2020

A primary focus of the CIC has been to increase its exposure to American infrastructure and manufacturing. By the end of 2020, 57% of the fund was invested in the United States.

“According to our estimate, the United States needs at least $8 trillion in infrastructure investments. There’s not sufficient capital from the U.S. government or private sector. It has to rely on foreign investments.”
– Ding Xuedong, Chairman, China Investment Corporation

This has drawn suspicion from U.S. regulators given the geopolitical tensions between the two countries. For further reading on the topic, consider this 2017 paper by the United States-China Economic and Security Review Commission.

Preparing for a Future Without Oil

Many of the countries associated with these SWFs are known for their robust fossil fuel industries. This includes Middle Eastern nations like Kuwait, Saudi Arabia, and the United Arab Emirates.

Oil has been an incredible source of wealth for these countries, but it’s unlikely to last forever. Some analysts believe that we could even see peak oil demand before 2030—though this doesn’t mean that oil will stop being an important resource.

Regardless, oil-producing countries are looking to hedge their reliance on fossil fuels. Their SWFs play an important role by taking oil revenue and investing it to generate returns and/or bolster other sectors of the economy.

An example of this is Saudi Arabia’s Public Investment Fund (PIF), which supports the country’s Vision 2030 framework by investing in clean energy and other promising sectors.

Electric Car Companies: Eating Tesla’s Dust

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Tesla has reigned supreme among electric car companies, ever since it first released the Roadster back in 2008.

The California-based company headed by Elon Musk ended 2020 with 23% of the EV market and recently became the first automaker to hit a $1 trillion market capitalization. However, competitors like Volkswagen hope to accelerate their own EV efforts to unseat Musk’s company as the dominant manufacturer.

This graphic based on data from EV Volumes compares Tesla and other top carmakers’ positions today—from an all-electric perspective—and gives market share projections for 2025.

Auto Majors Playing Catch-up

According to Wood Mackenzie, Volkswagen will become the largest manufacturer of EVs before 2030. In order to achieve this, the world’s second-biggest carmaker is in talks with suppliers to secure direct access to the raw materials for batteries.

It also plans to build six battery factories in Europe by 2030 and to invest globally in charging stations. Still, according to EV Volumes projections, by 2025 the German company is forecasted to have only 12% of the market versus Tesla’s 21%.

Other auto giants are following the same track towards EV adoption.

GM, the largest U.S. automaker, wants to stop selling fuel-burning cars by 2035. The company is making a big push into pure electric vehicles, with more than 30 new models expected by 2025.

Meanwhile, Ford expects 40% of its vehicles sold to be electric by the year 2030. The American carmaker has laid out plans to invest tens of billions of dollars in electric and autonomous vehicle efforts in the coming years.

Tesla’s Brand: A Secret Weapon

When it comes to electric car company brand awareness in the marketplace, Tesla still surpasses all others. In fact, more than one-fourth of shoppers who are considering an EV said Tesla is their top choice.

“They’ve done a wonderful job at presenting themselves as the innovative leader of electric vehicles and therefore, this is translating high awareness among consumers…”

—Rachelle Petusky, Research at Cox Automotive Mobility Group

Tesla recently surpassed Audi as the fourth-largest luxury car brand in the United States in 2020. It is now just behind BMW, Lexus, and Mercedes-Benz.

The Dominance of Electric Car Companies by 2040

BloombergNEF expects annual passenger EV sales to reach 13 million in 2025, 28 million in 2030, and 48 million by 2040, outselling gasoline and diesel models (42 million).

As the EV market continues to grow globally, competitors hope to take a run at Tesla’s lead—or at least stay in the race.