The heterogeneous and evolving roles of sovereign wealth funds: Issues, challenges, and research agenda

We introduce this special issue on sovereign wealth funds (SWFs) with a discussion on the four big themes currently affecting their behavior and performance: (1) the impact of recent macroeconomic upheaval on SWF funding and allocations, from COVID-19 economic shocks to Russia’s invasion of Ukraine; (2) the growing role of sustainability and responsible investing in the management of SWF portfolios; (3) the progressive switch in SWF allocations, away from public equity markets and increasingly toward alternative asset classes; and (4) the growing demands on SWFs to stabilize domestic economies, drive domestic development, and aid in the implementation of industrial policies. In all cases, the common theme is that SWFs are responding to current challenges and pressing demands in a heterogeneous manner, reflecting differences in social norms, funding sources, and investment mandates. We outline key studies in the SWF literature, and then describe the papers that comprise this special issue. We conclude with policy implications and suggestions for future research.