The Abu Dhabi Investment Authority, one of the world's biggest but most secretive state-controlled investment funds, made a small but significant step towards better disclosure by publishing its first annual review this week.

The report was light on details, and revealed little that was not already known by outside observers. However, Adia's report represents progress towards some transparency by the fund, and will be pored over by bankers hoping to manage some of its estimated $400bn-$450bn (€290bn- €328bn, £260bn-£294bn) of assets.

Adia has never disclosed its overall size or issued reports, and until May 2008 its website was rudimentary, listing only its name, address and switchboard number. Senior management have granted only four proper interviews since it was set up in 1976 and, apart from employees, the only people usually allowed in its headquarters are senior global bankers and money managers seeking its business.

The opacity of sovereign wealth funds has been a key focus of western critics, who fear politically driven investment decisions by largely autocratic states. The debate heated up when soaring asset prices swelled the coffers of many funds, turning them into big participants in global markets.

This led the International Monetary Fund to develop “best practices” for SWFs to improve their transparency and governance. The guidelines were adopted by leading funds in September 2008 – at a time when several had pumped billions into western banks – but the effect is starting to be seen now. The IMF guidelines, known as the Santiago Principles, are voluntary but many funds are tentatively responding to calls for more openness – as evidenced by Adia's report.

“We still know very little about the funds, but having tracked them for a while now, the improvement in disclosure is marked progress,” said Rachel Ziemba, an economist at Roubini Global Economics.

“All the funds are now looking at what kind of information they can give without jeopardising their strategies.”

The Santiago guidelines consist of two dozen “generally accepted principles and practices” that list objectives of public disclosure, investment motives, corporate governance and risk management. The principles were ratified by a newly formed International Forum of Sovereign Wealth Funds in Kuwait in April.

Adia's annual review followed similar action by the Government Investment Corporation and Temasek, Singapore's two sovereign wealth funds. They produce yearly reports intended to dispel suggestions that their investment activities are conducted with excessive secrecy. GIC, which published its first report in 2008 after 27 years of investing the island state's foreign reserves, said it was doing so in the light of “increasing concerns” in the US and Europe.

Tony Tan, deputy chairman, said in the report it was intended to “assure the investment community and the countries in which we invest that our activities have only one purpose – financial return.”

Qatar Holding, the direct investment arm of the Qatar Investment Authority, has also been considering publishing a similar report to Adia's. “It's a work in progress,” said one insider, suggesting that it might reveal more details than the Adia report.

Although disclosure is improving, few expect many SWFs will become as transparent as Norway's Government Pension Fund, Global, which lists its size, performance and investments. Few publicly reveal the most frequently requested piece of information – their total assets under management.

“In some countries there are concerns about publishing detailed information and numbers, given that there is sometimes a fine line between national and ruling family wealth,” Ms Ziemba pointed out.

For example, in Kuwait it is illegal to disclose the Kuwait Investment Authority's total size and returns.

This is in spite of the fact that it is one of the more transparent SWFs in the Middle East. It has also updated its website to comply with the Santiago Principles.

Yet in April 2008, as the debate over SWF investments was raging, Bader al-Sa'ad, the KIA's managing director, said there should be limits placed on transparency, arguing that “complete transparency would raise more questions than answers”.