Year: 2025
Type: article
Abstract: This study focuses on the financial risk control mechanisms of sovereign wealth funds (SWFs) in their offshore investment activities. Drawing on both domestic and international literature, it first clarifies the fundamental concepts of SWFs and the theoretical framework for financial risk control. Through analysis of global allocation patterns and representative Chinese cases, it reveals the evolution of SWF investment strategies and the principal risks they face—market risk, currency risk, credit risk, liquidity risk, and compliance risk. The study proposes an integrated risk-assessment system for dynamic monitoring and evaluation, and on this basis designs targeted risk-control strategies, including derivatives hedging, diversified portfolio allocation, enhancement of internal governance structures, and strengthening of compliance mechanisms. An empirical model is constructed using panel data from leading SWFs; the empirical results and robustness tests demonstrate that the proposed strategies significantly enhance portfolio resilience. Finally, by examining a typical case in depth, the paper offers practical recommendations for SWF management institutions and regulatory authorities to bolster the resilience and sustainability of offshore investment portfolios in an increasingly volatile global environment.
Source: Risk and Financial Management
DOI: 10.30560/rfm.v6n2p14
Author: Chen Yu
Institution: Chinese University of Hong Kong, Shenzhen
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4412920268