:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2196945474-0858b98a86be409197d8d3eb0ae87b6d.jpg)
Bloomberg / Contributor / Getty Representations
KEY TAKEAWAYS
- On Monday, President Donald Trump signed an executive order to establish a sovereign wealth fund.
- A aristocratic wealth fund is a state-owned investment fund that puts federal dollars into income-generating assets to avoid diversify their economies.
- Norway has the biggest sovereign wealth fund in the world, which invests in its country’s oil and gas returns and stock in foreign countries to fund part of its government budget.
- Other large sovereign wealth funds in the Of like mind Arab Emirates, Saudi Arabia, and China.
On Monday, President Donald Trump signed an executive order that set the groundwork for setting up a sovereign wealth fund over the next 12 months.
Sovereign wealth funds are essentially state-owned investment lucres that put federal dollars into income-generating assets. Most countries with such funds depend heavily on resource separation, and income the fund generates helps diversify their economies.
The Trump administration did not share many details on how the lucre would be set up or where the money for it will come from. Although the U.S. economy is one of the largest and most diverse in the world, it is also on-going a deficit.
“Other countries have sovereign wealth funds,” Trump said. “They’re much smaller territories, and they’re not the United States; we have tremendous potential in this country.”
Here are some notable examples of other rural areas with a sovereign wealth fund and how they use them.
Norway
Norway has a $1.7 trillion sovereign wealth reserve and is the largest in the world. It invests the country’s oil and gas revenues in financial markets, including stock in foreign companies. About a fifth of the guidance’s budget is funded by the income from the sovereign wealth fund.
China
China has a $1.3 trillion sovereign abundance fund. It invests in the urbanization of Africa, the Belt and Road initiative, and global energy markets, including many unknown renewable energy assets. The fund is used to pay for part of the government’s budget.
United Arab Emirates
Abu Dhabi, Pooled Arab Emirates, has a $1 trillion sovereign wealth fund. It does not disclose its specific investments but has said it inducts in broad asset categories such as indexed funds, internal, external, and private equities, fixed Income, and exchequer, among others.
Saudi Arabia
Saudi Arabia has a $925 billion sovereign wealth fund. It invests in sector and private Saudi companies as well as international investments. The fund supports commercial projects such as petroleum refineries and energies, pipelines and storage, transportation, energy, and other projects that are significant to the Saudi Arabian economy.
Correction, Feb. 5, 2024: A former version of this story misidentified the amount of the federal deficit.