•  Trump in a speech to business leaders  called for the creation of a U.S. sovereign wealth fund, a government-owned investment fund, to finance “great national endeavors.”


• While offering few details, Trump said the fund would would yield a “gigantic profit” that could help “pay down the national debt” — an unmet goal from his 2016 campaign.


• Sovereign wealth funds are prevalent throughout the industrialized and developing world, with the largest ones residing in oil-rich states like Norway, Saudi Arabia and other Persian Gulf nations as well as China, Singapore and Hong Kong.


• “Why don’t we have a wealth fund? Other countries have wealth funds. We have nothing,” Trump said during his speech to The Economic Club of New York, adding that the U.S. fund would be financed by tariffs “and other intelligent things.”


• According to the Sovereign Wealth Fund Institute, roughly 100 funds currently manage nearly $13 trillion in assets. That includes a handful of U.S. states including Alaska, Texas, New Mexico and others which have set up their own types of government-run funds initially financed by oil, gas and mineral resources. Trump now wants to do the same at the federal level.

Source:  rollcall.com 

• A sovereign wealth fund is a state-owned investment fund comprised of money generated by the government, often derived from a country’s surplus reserves. SWFs provide a benefit for a country’s economy and its citizens.

Understanding Sovereign Wealth Funds (SWFs)

• The funding for a sovereign wealth fund can come from a variety of sources. Popular sources are surplus reserves from state-owned natural resource revenues, trade surpluses, bank reserves that may accumulate from budgeting excesses, foreign currency operations, money from privatizations, and governmental transfer payments.


• In general, sovereign wealth funds usually have a targeted purpose. Some countries have sovereign wealth funds that can be similar to venture capital for the private sector.


• Similar to any type of investment fund, SWFs have their own objectives, terms, risk tolerances, liability matches, and liquidity concerns. Some funds may prefer returns over liquidity and vice versa. Depending on the assets and objectives, sovereign wealth funds’ risk management can range from very conservative to a high tolerance for risk.