Worried about sovereign wealth funds? Youre not alone, according to financial website breakingviews.com.
Critics worry that SWFs tend to be secretive, target political as well as financial returns, and operate at the whim of governments not always sympathetic to Western economic and political interests, wrote columnists Una Galani and Simon Nixon.
To allay fears, breakingviews.com created the Sovereign Wealth Fund Index, which measures 20 SWFs on the basis of three criteria: transparency; strategic control; and political threat. SWFs are graded from one to five in each of the three categories, with five being most risky.
The website noted that anything in double digits is considered a high potential risk to Western investor interests. Three funds scored over the risk threshold. The $200 billion China Investment Corp. topped the list, with a score of 11 out of 15, followed by the $60 billion Qatar Investment Authority and the $17.5 billion National Development Fund (Venezuela), which each scored 10 .
Least risky, with a score of three, were the $322 billion Government Pension Fund-Global (Norway); the $40 billion Permanent Reserve Fund (Alaska); and the $16.4 billion Alberta Heritage Savings Trust Fund (Canada).
The index can be found on www.breakingviews.com. Christine Williamson