As an investment manager for a sovereign wealth fund (SWF), you have been tasked with addressing the current challenges and opportunities in managing the fund's portfolio in light of increasing global economic volatility. Discuss the specific investment strategies that could be employed by SWFs to enhance their risk-adjusted returns while fulfilling their mandates of preserving wealth and supporting national economic objectives.
In your response, be sure to consider factors such as the fund's long-term horizon, liquidity requirements, and ethical considerations regarding investment choices. Furthermore, analyze how portfolio diversification across different asset classes and geographies can mitigate risks associated with economic fluctuations.