SWFs attempt to invest in a wide spectrum of high yielding assets, for example, longer term government bonds, agencies and agency-backed securities, corporate bonds, equities, commodities, real estate, private equity, hedge funds, etc. The investment horizon is extended so as to enable sharing of wealth across generations or to achieve other long-term objectives.
To illustrate, the Economist of September 29-October 5, 2007 refers to the SWFs as “The new Rothschilds” and sub-titles the write up as “State-run funds are pumping money into the financial sector”.