Americans fear foreign funds may threaten economy

By Svea Herbst-Bayliss

BOSTON (Reuters) - The majority of Americans fear the U.S. economy and national security could be hurt if sovereign wealth funds, the investment arms of foreign governments, put more money into U.S. companies, new data show.

U.S. voters do not want these funds, which currently manage between $1.9 trillion and $2.9 trillion, to buy stakes in high tech firms, banks, oil and gas companies and ports, a study released on Thursday by the business advisory group Public Strategies said.

The poll found that 55 percent feel the funds would hurt national security and 49 percent said the funds would have a negative impact on an already slowing U.S. economy.

While Americans know little about these types of funds, their gut reaction is negative, said Dan Bartlett, a senior strategist at Public Strategies.

The public's fear stands in sharp contrast with Washington and Wall Street's more positive views as government officials and company executives agree that foreign investments can help American companies compete better. Financial giant Citigroup (C.N: Quote, Profile, Research), for example, raised $12.5 billion from foreign funds this year alone after posting heavy losses last year.

Roughly 68 percent of the 1,000 registered U.S. voters who were surveyed last week worry that foreign governments would gain too much control over the market if they kept making more investments here.

The survey had a margin of error of plus-or-minus 3.1 percentage points.

"Americans are becoming increasingly isolationist in their thinking in these issues," Bartlett, a former counselor to President George W. Bush, said adding, "The more they learn about sovereign wealth funds, they worse they feel."