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Explainer: What is a sovereign wealth fund?


Published on 2025-02-03 16:20:46 - Reuters
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  • President Donald Trump on Monday signed an executive order ordering the U.S. Treasury and Commerce Departments to create a sovereign wealth fund for the United States.

A sovereign wealth fund (SWF) is a state-owned investment vehicle that manages a country's reserves, typically derived from commodity exports or trade surpluses, to achieve financial returns and economic stability. These funds invest globally in various asset classes like stocks, bonds, real estate, and infrastructure, aiming for long-term growth rather than short-term gains. SWFs are significant in the global financial landscape, with examples like Norway's Government Pension Fund Global, which is the largest, and others from countries like China, Singapore, and the UAE. They play a crucial role in stabilizing economies, funding future liabilities, and sometimes supporting national industries or strategic sectors. However, their operations can raise concerns about transparency, governance, and potential political influence in foreign investments.

Read the Full Reuters Article at:
[ https://www.reuters.com/business/finance/what-is-sovereign-wealth-fund-2025-02-03/ ]
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