Sovereign wealth funds pour $132 billion into US, emerging markets take a hit
Sovereign wealth and public pension funds channelled a record share of capital into the United States in 2025, while emerging markets saw a sharp decline in inflows despite strong performance.
Synopsis
Sovereign wealth and public pension funds channelled a record share of capital into the United States in 2025, while emerging markets saw a sharp decline in inflows despite strong performance.
IANS
Global sovereign capital gravitates towards the US, widening the gap with emerging markets.
In 2025, sovereign wealth and public pension fund investors poured a staggering $132 billion, roughly half of their total investments for the year, into the United States, according to the latest annual report from Global SWF. By contrast, major emerging markets drew almost a third less than in 2024, despite posting strong returns.
The report highlighted that sovereign wealth funds now manage record assets of $15 trillion, contributing to a historic $60 trillion in combined assets under management across state owned investors, public pension funds and central banks. Overall, sovereign wealth fund investments grew by 35% to $179.3 billion in 2025.
Emerging Markets Slide
Emerging markets, particularly China, India, Indonesia and Saudi Arabia, were the biggest losers, receiving only 15% of total sovereign investments, a 28% drop from 2024. Global SWF managing director Diego Lopez noted that while these economies performed well, the flow of capital shifted sharply towards the US.
Private credit investors, however, have started pivoting back to emerging markets in search of stronger returns and more attractive project structures. The report also noted that all 11 new sovereign funds launched in 2025 originated in emerging markets. With oil prices under pressure, Lopez predicted that 2026 could be a challenging year for oil dependent sovereign funds, while sectors like natural gas and metals, including copper, may drive new capital flows.
The US Pulling Power Remains Strong
The US retained its appeal as the destination of choice for global sovereign and pension funds. Investments focused heavily on digital infrastructure, data centres and AI companies, reflecting a change in paradigm for recipient countries. Lopez emphasised that the $132 billion figure does not include the estimated $2.2 trillion already held in the “Magnificent 7” US stocks, Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla.