Investment Strategies of Sovereign Wealth Funds vs. Traditional Investors

Sovereign Wealth Funds (SWFs) have been pivotal in shaping the global investment landscape. As state-owned entities, they invest a portion of a country’s reserves in various asset classes, including equities, fixed income, alternatives, and real estate. The rationale behind their establishment often includes stabilizing the economy, funding future generations, and managing fluctuations in revenue from commodities.

Using this context, discuss how the investment strategies of SWFs differ from traditional institutional investors. In your response, consider the unique goals, risk tolerances, and investment philosophies that characterize SWFs.