What is the difference between a sovereign wealth fund and a national pension fund?

What is the difference between a sovereign wealth fund and a national pension fund Introduction: The Significance of Financial Institutions Hello everyone! In the realm of finance, there are numerous institutions that play pivotal roles in shaping a country's economic landscape. Today, we'll be focusing on two such entities: sovereign wealth funds and national pension funds. While both are crucial in their own right, they differ significantly in terms of their objectives, funding sources, and investment strategies. Let's dive in! Sovereign Wealth Funds: A Closer Look Sovereign wealth funds, often established by governments, are designed to manage and invest a nation's surplus financial resources. These funds typically originate from revenues generated by exports of natural resources, such as oil or minerals. The primary objective of a sovereign wealth fund is to preserve and grow the nation's wealth for future generations. They often adopt a long-term investment approach, focusing on diverse asset classes, including stocks, bonds, real estate, and even alternative investments like private equity or infrastructure projects. By doing so, they aim to generate sustainable returns and mitigate risks associated with market volatility. National Pension Funds: A Deeper Understanding