Business and Finance Business and Finance
Fri, February 7, 2025
[ Fri, Feb 07th ] - Indiatimes
RBI MPC Meeting Live
Thu, February 6, 2025

Trump's Sovereign Wealth Fund: What Is It And How Does It Work?


Published on 2025-02-06 13:40:58 - Kiplinger
  Print publication without navigation

  • President Trump signed an executive order that puts in motion plans for a U.S. sovereign wealth fund. Here's what a sovereign wealth fund is and how it works.

A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds, real estate, or other financial instruments funded by foreign exchange assets. These funds are typically established by countries with budget surpluses, often derived from natural resources like oil or from foreign exchange reserves. SWFs invest globally to achieve long-term returns, diversify economic risk, and prepare for future economic challenges or to fund public services. They differ from other state funds like pension funds or reserve funds in their investment strategies and objectives, focusing on wealth preservation and growth rather than immediate fiscal needs. Sovereign wealth funds can influence global financial markets due to their size and investment power, and they are often seen as tools for economic stability and development. Examples include Norway's Government Pension Fund Global, the Abu Dhabi Investment Authority, and China Investment Corporation.

Read the Full Kiplinger Article at:
[ https://www.kiplinger.com/investing/sovereign-wealth-fund-what-is-it-how-does-it-work ]
Contributing Sources