Feb 28, 2009

Follow The Money

The term Sovereign wealth fund was first used in 2005 by Andrew Romanov in an article entitled 'Who holds the wealth of nations? In the article, Mr.Romanov mentioned that “Typically, sovereign wealth funds are a by-product of national budget surpluses, accumulated over the years due to favorable macroeconomic, trade and fiscal positions, coupled with long-term budget planning and spending restraint. Usually, these funds are set up with one or more of the following objectives: insulate the budget and economy from excess volatility in revenues, help monetary authorities sterilize unwanted liquidity, build up savings for future
generations, or use the money for economic and social

Translation – Sovereign funds functioned as a vehicle through which cash rich nations could invest in fairly stable, promising investment products.

Follow The Money: The current global economic downturn offers some unique opportunities for cash-rich global funds to pick up choice assets at bargain prices. A brief study of the key holdings in some of these funds may offer some insights for would-be investors.

Note: I’m making an assumption that these sovereign wealth managers will make smart investment decisions. At the very least, we should notice some consistent themes  across funds from Asia, S/America & the Middle east.

Below is a list of 14 funds – which were featured in Mr.. Romanov's article, back in ‘05.

Country Fund Name Assets  ‘05 $B Assets Feb ‘09
United Arab Emirates Abu Dhabi Investment Authority $250,000 Billion $875 Billion
Norway Government Petroleum Fund $170,000 Billion $350 Billion
Hong Kong Investment Portfolio (HKMA) $100,000 Billion $173 Billion
Kuwait Kuwait Investment Authority $65,000 Billion $202 Billion
Singapore GIC $100,000 Billion $330 Billion
Brunei BIA $30,000 Billion $30 Billion
USA (Alaska) Permanent Reserve Fund $29,800 Billion $29 Billion
Russia Stabilization Fund $27,700 Billion $137 Billion
Malaysia Khazanah Nasional BHD $ 15,800 Billion 25.7 Billion
Trinidad & Tobago Revenue Stabilization Fund 460 Million 2.9 Billion
Canada Alberta Heritage $9,800 Billion 14.9 Billion
Chile Copper Stabilization Fund $3,900 Billion $21 Billion
Oman State General Reserve Fund $2,000 Billion $8.2 Billion
Venezuela FIEM $714M $~700M

Feb 27, 2009

The Real Value of Sovereign Funds

So, what's the real value of sovereign funds?

Years ago, I worked for a mutual funds company called Trimark. At the time, it was one of the largest fund company's in Canada. At the time - mutual funds were the primary investment vehicle of choice for many North Americans.

The key selling point? Mutual funds are stable - less volatile than owning individual stocks, and safer too, because you spread the risk across different investment vehicles. I learnt a little about the investment industry and even did a little day trading.

Lately, I've developed an interest in sovereign funds - a friend asked me why and I decided to respond through a series of blog posts.

First - What is a Sovereign fund? A sovereign wealth fund is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other investment products.

Some sovereign wealth funds are held solely by central banks of the country in question. The central banks often accumulate the funds in the course of their management of a nation's banking system; this type of fund is usually of major economic and fiscal importance to the country.

Other sovereign wealth funds are simply the state savings which are invested by various entities for the purposes of investment return, and which may not have significant role in fiscal management.

During my days at Trimark – I learnt the importance of following the money. Any Mutual fund performs only as well as it's key holdings. These Sovereign funds have 100's of Billions of dollars invested - worldwide, and a cursory review of their key holdings can offer interesting insights about global investment trends.

Sovereign funds offer a great window into the global investment strategies of some of the brightest investment managers in the world. Over the next few months – I’ll identify and group a handful of investment products, based on my research into Sovereign funds.

I’ll build a series of portfolio’s – based on my findings, and share monthly performance updates with the rest of you World Changers.

Have a great weekend……….

Feb 26, 2009

World Changers Always Finish Strong

I came across this video clip and I figure it's worth sharing. I'm constantly reminded of the importance of finishing strong ........

Feb 18, 2009

Sound Judgement & Discernment

Greetings, fellow WorldChangers - This week I'm in Salt-Lake City, Utah - attending a Conference. If you've never been to Salt-Lake City, I'd highly recommend it - very beautiful terrain.

Lately, I've been spending more and more of my time thinking about Leadership - thought leadership, servant leadership and personality traits of great leaders. Recently - I launched the Leadership Journal - to help socialize some of my ideas and those of other thought leaders. I'm hoping that the Journal will become a good resource for aspiring leaders everywhere. A forum through which we can all learn about the skill and character traits required to be a great leader.

This morning - I found myself thinking about Dr Ben Carson, and what I learnt from him, about leading a purposeful life. One thing he mentioned - which resonated with me, was that he reads something the book of Proverbs every day.

I understand that not all of my blog readers are Christians - some of you may not be religious, that doesn't mean you won't benefit from the insights in the book of Proverbs. There is something for everyone and every situation - in that book.

Today - I read Chapt 3 - vs 21-25. It talks about the value of sound judgment and discernment. It also counsels readers not to be consumed by fear of sudden disaster. It seems to me that, in these hard times, we all need a little encouragement. I get mine through prayer and reading the bible. I'd like to challenge anyone who reads this post - to pick up a bible and read one or two lines from the book of Proverbs. You can get a version of the bible which breaks down the core message, in simple everyday language.

Perhaps you're thinking - You don't have time? 5 minutes is all you need...

Try to make the effort - you have absolutely nothing to lose, and plenty to gain.


Feb 7, 2009

Dr. Ben Carson

Tonight – I watched the TNT Movie - “Gifted Hands”. It’s the story of Dr. Ben Carson, one of the most gifted Pediatric Neurosurgeons the world has ever seen. I feel truly blessed to have watched this movie – and I’d recommend it to any aspiring World Changer. Here’s what I learnt from Dr. Carson.

His Mother taught him the value of reading at an early age, by challenging him to read 2 books each week, and write a report. Reading books is one thing - writing a report or some sought of of review helps ensure that the key learning's stick.

When Ben was an adolescent – he was plagued by a very violent temper. One afternoon at school,a colleague attempted to bully him, Ben was enraged and actually stabbed the individual. Fortunately, he caught a break – the blade broke. That day, he prayed to God to help him gain control of his temper – the rest is history.

God Answers Prayers…

When Ben arrived at Yale, he was consumed with self-doubt. He was able to pull through – by drawing on his strengths and the self-belief that his mother had constantly instilled in him, from a very young age. Words are powerful – we need to continually nurture strength of spirit, inspire ourselves and others.

Shortly after he started at John’s Hopkins – the nurse on duty mistook him for an orderly and not a new intern. Undoubtedly he must have faced a great deal of provocation – but he never let it get to him. He stayed upbeat and focused and allowed his work to speak for itself.

Dr. Carson was and remains a remarkably introspective person, with a strong sense of self belief. Like Barack – he’s proven that it’s possible to be confident, self assured and very driven – without being arrogant, derogatory or overbearing.

I hope to learn more about Dr.Carson in the months ahead – he has written 3 books and over 100 journals – so there’s much to learn.