Government investing and government-backed securities are important tools, aiding in the function of the global economy and local financial systems. Government back securities are debt instruments issued by a local government. Due to the nature of these securities, they are considered to be lower risk than other financial securities. This particularly applies to
as the markets for these bonds are extremely liquid. As a result of this, many government investment funds such as public pension funds
Government funds
State-owned investment funds are an essential tool for improving the local economy and society. The two primary fund types are Sovereign Wealth Funds (SWFs) and PPFs. These funds are initially financed by the state with the aim of becoming profitable. PPFs are used to provide local citizens with a pension upon retirement, the
Government Pension Investment Fund (GPIF) is one of the
world`s leading PPFs and has become self-sustainable through cumulative investment income generated through effective portfolio management.
SWFs worldwide are also managed on behalf of the state in order to create a profit. The revenues generated by SWFs are utilized to aid in stabilizing the local economy and in uplifting the local society by funding local initiatives.
Government bonds
Government bonds play a vital role in the local and global economy. Government-issued bonds can aid the national budget in times of a funding deficit. Municipal government bonds are issued to gain funding for specific projects such as new infrastructure, and
green bonds are similar in nature being utilized to fund environmental projects. Bonds are also an important tool used in controlling money supply. Upon purchasing a government bond, the investor loaned money to the local government. In return, the investor will receive their money back at face value plus additional interest payments. Due to bonds being backed by the state, there is a low risk of default. However, the rates of return are lower than other financial securities. Typically, bonds are a fixed-rate investment. However, the
yield on government bonds globally may be affected if the
rate of inflation increases.
This text provides general information. Statista assumes no
liability for the information given being complete or correct.
Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.
