Abstract
Purpose- The article examines the key factors affecting the use of the National Fund of Kazakhstan (NFK) in 2005-2017, as well as the development of more effective methods and actions to improve its performance in the future. Methodology- The study has developed a functional model of transfers from it to the state budget (spending rule), which helps to explain the observed dynamics of its use. The model was examined by using dynamic panel estimation techniques. As result it was found that transfers from oil fund to the state budget are dependent on economic activity, non-oil budget deficit and inflation in the country. An econometric test confirmed the correctness of the assumptions about the factors used in the model. Findings- A multivariate forecast was also made for NFK's assets for the period until the end of 2022. Upon the favorable scenario, the value of the assets of the oil fund will reach 57.5 billion US dollars at the end of 2022. If world oil prices fall from 68 to 50 US dollars per barrel and remain at this level, the oil fund’s assets will be exhausted in 6-7 years. If oil prices fall to 30 US dollars, then the fund's oil assets will last only 5 years. Conclusion- The principles of the formation and use of the NFK should be revised in order to ensure the long-term preservation of the fund's assets for future generations as originally planned. Keywords: Sovereign wealth funds, oil fund, asset management, Kazakhstan JEL Codes: D25, D53, D58