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4.5.4 Sovereign Wealth Funds (Edexcel A-Level Economics Teaching PowerPoint)


Last updated 12 Nov 2023

This Edexcel Teaching Powerpoint covers Sovereign Wealth Funds

Sovereign wealth funds (SWFs) are state-owned investment vehicles that are used to manage a country's excess foreign currency reserves. Here's the lowdown on SWFs:

  • SWFs were initially created in the 1960s to manage the wealth of oil-rich countries like Kuwait and Abu Dhabi.
  • They have since expanded to include countries with excess reserves from other sources, such as China, Norway, and South Korea.
  • SWFs invest in a variety of assets, including stocks, bonds, real estate, and alternative investments such as private equity and hedge funds.
  • The primary purpose of SWFs is to generate long-term returns that can be used to fund government spending, diversify a country's economy, or support social programs.
  • SWFs can be controversial, as they are often associated with countries that have a history of corruption or political instability, and their investments can sometimes be seen as a form of economic or political influence.

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