Understanding Sovereign Wealth Funds: Objectives and Investment Strategies

In recent years, Sovereign Wealth Funds (SWFs) have garnered significant attention from both financial markets and policymakers due to their growing influence and portfolio strategies. As an important component of institutional portfolio management, SWFs play a critical role in stabilizing economies, managing surplus capital, and diversifying national savings.

Discuss the primary objectives of Sovereign Wealth Funds and the factors that influence their investment strategies. In your answer, highlight the potential risks associated with SWF investments and how they can impact both domestic and foreign markets.