National Welfare Fund
Country: Russian Federation
Established: 2008
US$ Billion: $32.7 new fund, $162.5 Total
Origin: Oil
Transparency Rating: 4*
*The Oil Stabilisation Fund
Summary:
As of Feb 2008, the Oil Stabilisation Fund will be split into two funds, one section managing official reserves, while the second part becomes the official sovereign wealth fund, National Welfare Fund.
Two Sections:
Oil Stabilisation Fund
AUM: $129.8 Billion Reserve Fund
The Oil Stabilization Fund, by law, may only be invested in foreign government bonds.
National Welfare Fund
AUM: $32.7 Billion
With just $32 Billion starting out, the fund could dramatically rise in if Oil Prices continue to rise. The fund will mostly be managed by the Russian Ministry of Finance.
Furthermore the Fund is to serve as an important tool for absorbing excessive liquidity, reducing inflationary pressure and insulating the economy from volatility of oil & gas export earnings.
This fund will be allowed to invest in riskier assets, such as corporate bonds and possibly equities.
News and Updates
5/7/2008
Weak Dollar Slows Down Oil Stabilisation Fund Growth
The oil stabilization fund has lost value due to the US dollar depreciating. Even though the US dollar is depreciating, it is being offset by high oil commodity prices.
read more: Kommersant
4/21/2008
Deputy finance minister: Russia should invest oil wealth abroad
Reuters reports that, “Russia should keep investing its oil and gas revenues abroad rather than trying to use them to prop up domestic growth, Deputy Finance Minister Dmitry Pankin said on Monday. The investment of the newly-created $32 billion national wealth fund is a big issue in Russia, with the finance ministry saying the money should stay abroad, but others, including President Vladimir Putin, have said at least a portion of it could be used at home.”
read more: Reuters
04/11/2008
5-10% of National Welfare Fund invested in Russian markets
Between 5% and 10% of Russia’s National Welfare Fund may be invested in domestic financial markets, Deputy Prime Minister and Finance Minister Alexei Kudrin told reporters Tuesday. "We'll start from 5%, and subsequently we could increase that figure to 10%," he said.
read more: Prime-Tass
3/26/08
Russia's VTB may become sovereign wealth manager
According to Reuters, "Russia's second-largest bank, state-controlled VTB, may become an asset manager for Russia's $32 billion National Wealth Fund (NWF), Finance Minister Alexei Kudrin was quoted as saying on Wednesday."
read more: Reuters
2/8/2008
Expressing interest in Japanese Bonds & Equities
"We are interested in Japanese government bonds and Japanese firms' stocks," Kudrin told Reuters after a meeting with Japanese Finance Minister Fukushiro Nukaga.
1/30/2008
Splitting of oil stabilisation fund into reserve fund and National Welfare Fund ($32 Billion)
The Russia's Finance Ministry has until Oct. 1 2008 to design an infrastructure for the sovereign fund's investment; meanwhile the money in the fund will be invested in sovereign or government agency bonds rated not lower than "AA-".
$157 Billion Oil Stabilisation Fund will now = $125 Billion Reserve Fund + $32 Billion SWF
Location
109097, Moscow, Ilinka Str. 9
Website
Stabilization Fund of the Russian Federation
1. All figures quoted are from official sources, or, where the institutions concerned do not issue statistics of their holdings, from other publicly available sources.
|
