Author and editor‑in‑chief: Vitaliy Kisterny 26.09.2026 07:05:00

While the whole world is debating dollarization and the decline of the dollar’s share in central bank reserves, another force works behind the scenes — sovereign wealth funds. Their combined assets exceed $12 trillion, and a significant portion of that money is invested in dollar‑denominated assets.

The Norwegian oil fund, Saudi Arabia’s PIF, Abu Dhabi Investment Authority, Singapore’s GIC and Temasek, and China’s CIC—all manage massive fortunes that need to be invested somewhere.

Although these funds belong to different countries, their investments often flow into U.S. stocks, bonds, and real estate. This creates a steady demand for dollars that is independent of Fed policy or geopolitics.

Photo: © Belnovosti / U.S. dollar. Author Vitaliy Kisterny What are sovereign funds and why they matter

Sovereign wealth funds are state investment funds that manage a country’s surplus reserves. They are created for various purposes: preserving oil revenues for future generations (as in Norway or Saudi Arabia), stabilizing the budget (as in Chile or Botswana), or simply to grow national wealth (as in Singapore or China).

Their combined assets exceed $12 trillion. For comparison, that’s more than the GDP of Japan or Germany

Thirdly, American assets have historically delivered solid returns. Funds that are meant to secure future generations cannot afford to take risks or invest in volatile markets. U.S. stocks and bonds are a time‑tested choice.

As analysts point out, sovereign funds are the quiet giants of the dollar market. They do not speculate, panic, or change strategy daily. They simply buy dollars and hold them.

Who and how much is investing

Norway’s sovereign wealth fund, the largest in the world, holds about 70 % of its assets in equities, 25 % in bonds, and 5 % in real estate. A significant portion of these investments is American. The fund owns stakes in thousands of companies worldwide, but its

What's next

The assets of sovereign funds will continue to grow. Oil revenues, budget surpluses, and generational savings are creating new funds that need to be invested somewhere. This means that demand for dollars in this sector will only increase.

For the dollar, this means it has another sustainable support that will not disappear in the coming decades. Even if other factors weaken, sovereign funds will remain a quiet haven for the American currency.

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