China's State Administration of Foreign Exchange (SAFE) is set to surpass $2 trillion in assets under management, becoming the world's second-largest sovereign wealth fund after Norway's, according to official data.
SAFE's assets increased from $1.42 trillion at the beginning of 2025 to $1.98 trillion in July 2026. The fund, a subsidiary of the People's Bank of China, invests in international bonds, equities and alternative assets.
The rise has lifted SAFE ahead of China Investment Corporation (CIC), which manages $1.57 trillion in assets. Norway's sovereign wealth fund, managed by Norges Bank Investment Management, remains the world's largest with assets of about $2.1 trillion.
The growth highlights the expanding role of sovereign wealth funds in global capital markets. Collectively, sovereign wealth funds manage about $16 trillion in assets and continue to increase investments across public markets, private capital and infrastructure.
Equities Drive Asset Growth
SAFE's equity allocation rose to 63.5% of its portfolio and was the main contributor to the increase in assets.
The value of its equity holdings climbed by about $400 billion to $1.26 trillion, while bond holdings increased by $167.2 billion to $724.7 billion.
SAFE operates through subsidiaries in Hong Kong, Singapore, New York, London and Frankfurt. Its Hong Kong exposure rose by $368.8 billion to $978.9 billion, accounting for almost half of the portfolio. The United States remained its second-largest country exposure at $364 billion.
Mainland flows into Hong Kong-listed shares and ETFs expanded sharply in 2025. It gave Chinese institutions offshore exposure while keeping capital movement inside a managed framework, sovereign assets tracker Global SWF said.
Traditionally known for maintaining a low profile, SAFE has attracted attention through investments in Australian banks ANZ, Commonwealth Bank and National Australia Bank. The fund also holds stakes in Shell, BP, Rio Tinto, Barclays and Royal Bank of Scotland. It has no investments in Indian listed equities.
SAFE also allocates capital to external asset managers including BlackRock, Vanguard and State Street. It invests through offshore corporate structures and has exposure to U.S. private equity and hedge funds, as well as Japanese companies including Toyota and Sony.
"The asset base appears through external portfolio statistics and regulated financial institutions, not one neat fund balance sheet," Global SWF said in a recent LinkedIn post.
Global Sovereign Funds Expand Investments
Among the world's five largest sovereign wealth funds, Abu Dhabi Investment Authority and Saudi Arabia's Public Investment Fund each manage more than $1.1 trillion in assets, following CIC. They are followed by Kuwait Investment Authority, Singapore's GIC and Qatar Investment Authority.
According to SWF Institute data, Indonesia's Badan Pengelola Investasi Daya Anagata Nusantara, established in 2025, also manages close to $1 trillion in assets. Other large sovereign wealth funds include Singapore's Temasek Holdings, Investment Corporation of Dubai, Mubadala Investment, Korea Investment Corporation and Turkey's sovereign wealth fund.
Although GIC ranks seventh globally by assets, it is the largest sovereign wealth fund investor in India. Norges Bank Investment Management, Abu Dhabi Investment Authority and Kuwait Investment Authority are also among the country's major sovereign investors. Total sovereign wealth fund investments in India exceed $100 billion, with about half invested in listed equities.
Sovereign wealth funds are also increasing private investments in India. Abu Dhabi Investment Authority's $1 billion infrastructure partnership with the National Investment and Infrastructure Fund forms part of its long-term investment plans in the country.
AI Becomes A Key Investment Theme
Sovereign wealth funds have expanded beyond their traditional role of investing surplus oil and mineral revenues, with many increasing allocations to private markets and technology.
"The current SWF investment landscape is defined by a massive structural rotation away from highly concentrated public equity markets into private markets, real assets, and cutting-edge technology," PricewaterhouseCoopers said in a wealth report.
The report said sovereign investors are increasingly financing artificial intelligence through investments in companies such as OpenAI and Anthropic, while also backing private data centres, semiconductor supply chains and energy infrastructure needed for next-generation computing.
Countries including the United States and Portugal are planning new sovereign wealth funds. U.S. President Donald Trump signed an executive order to establish a sovereign wealth fund, expected to be managed by the Treasury Department. The United Kingdom launched its National Wealth Fund in 2024 to support private investment in green energy and industrial infrastructure.
Middle Eastern sovereign wealth funds continue to play a major role in global transactions. They have participated in about half of global deals valued at more than $1 billion in recent years and have deployed significant capital across the United States, China and the United Kingdom.
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