SWFs must go passive

By Jame DiBiasio | 2 September 2008
Keywords: ssga
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Says a practitioner of index investing. But the logic is compelling for large state-linked investment agencies to include passive allocations.

Sovereign wealth funds are expected to take up index investing in order to achieve broad diversification in equities, with direct or strategic investments becoming relatively fewer as a proportion of rapidly growing assets under management.

So concludes State Street Global Advisors, which is a leading provider of index funds to institutional investors. SSgA currently manages $250 billion of assets sourced from ‘official institutions’, which account for about 13% of the $1.9 trillion it manages in total.

SWFs – a term coined by SSgA – now manage $3 trillion worldwide and ...
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