On November 2, Hong Kong’s Exchange Fund reported its worst ever quarterly loss. For the quarter the number was an astonishing -HK$63.8 billion, turning what was an already-reduced YTD profit from Q2 into a –HK$36.8 billion loss so far for 2015. What caught most people’s attention was not specifically the loss but that it was derived more so from “other equities” (-HK$34.1 billion) rather than strictly those trading in Hong Kong (-HK$30.7 billion). In other words, some began to wonder why Hong Kong’s primary sovereign wealth fund, tasked with a particular monetary effort, would be “investing” in China’s stock bubble.

The category “other equities” isn’t strictly Chinese stocks, of course. Sovereign wealth funds around the world invest in all kinds of assets around the world. What is notable about them in 2015 is that they are still concentrated mostly in the oil-producing areas and had steadfastly maintained their affinity for stocks. Funded by oil revenues, mostly, it is estimated that sovereign wealth funds have amassed at least $7 trillion in assets and quite likely significantly more than that. Hong Kong’s fund is more the exception in terms of its funding.

Perhaps the prime example, and undoubtedly a fund that has earned its respectful reputation, is Norway’s Government Pension Fund Global. Managed by an internal unit within the nation’s central bank, the fund has upended what was conventional “big fund” logic. The Yale model of investment had, unchallenged for decades, pushed larger asset pools such as sovereign and pension funds toward the illiquid assets – such as private equity and bespoke arrangements (equity and otherwise). Norway’s fund has instead been aimed exclusively and quite purposefully at publicly-traded securities.

We focus a lot of attention and effort at defining the “non-investment” flows into global equities in terms of corporate share repurchases with good reason, but that should not be considered exhaustive. It isn’t nearly as appreciated, but sovereign wealth funds have been a major stock market trend (and fixed income, even “reach for yield”) in their own right. That sets up a sort of petro-stock flow, operating in an almost direct manner exactly as the wrongly-characterized petro-dollar is thought to. Oil revenues are recycled back into the world’s asset markets.