Asset management and formation of a portfolio by any asset holder, including the Sovereign Wealth Funds (SWFs), is rooted from the investment strategy of the holder which is reflection of objectives and the level of risk tolerance. The investment strategy ranges from passive to extremely active approach depending on the horizon of investment, expected risk-return and degree of asset liquidity. The GPFG of Norway portfolio has been diversified by 62.4 percent of equities, 36.7 percent fixed income and 0.9 percent in real estate. The asset mix of GIC encompasses 46% public equity, 21% fixed income, 26% alternative assets, 7% cash and others while the portfolio of CIC of china includes 46% equity, 21% fixed income and 33% alternatives . National Development Fund of Iran (NDFI) established with the objectives of conserving a portion of oil and gas revenues, changing them to productive wealth for the sake of Iran’s sustainable development and preserving the share of future generation. The portfolio of NDFI as a kind of Sovereign Development Fund (SDF) is limited to “domestic financing” and investment in the “international financial markets”. The current portfolio policy mandates NDFI to allocate 90% and 10% of its resources to domestic financing and foreign investment respectively. The international portion of NDFI portfolio has been planned for mostly fixed income assets and underpinned with moderate risk profile. A passive or “buy and hold” policy and laddering approach has been adopted to evolve in the near future to a “quasi passive or index matching” policy. The currency basket of fixed
income portfolio will be mostly SDR currencies to tackle the exposure risk of local currencies.
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