MC Desk | February 4, 2025
Image: Canva
U.S. President Donald Trump signed an executive order directing the Treasury and Commerce Departments to establish the sovereign wealth fund (SWF) for the United States.
Image: Canva
Image: Canva
A sovereign wealth fund is a state-owned investment fund that typically invests in financial markets, infrastructure, or other assets to generate returns for a nation’s long-term economic benefit.
Image: Canva
Image: Canva
More than 90 SWFs worldwide hold a combined $8 trillion in assets, with countries like Norway, China, and Saudi Arabia managing some of the largest funds.
Image: Canva
Image: Canva
Most SWFs are funded by budget surpluses, natural resource revenues, or trade surpluses. However, the U.S. has been running fiscal deficits, raising questions about funding sources.
Image: Canva
Image: Canva
Trump had earlier suggested that the fund would finance large-scale infrastructure projects such as highways, airports, and research in manufacturing and medicine.
Image: Canva
Image: Canva
While Trump did not specify an initial fund size, he previously indicated that the U.S. sovereign wealth fund should aim for at least $2 trillion—potentially making it the world’s largest.
Image: Canva
Image: Canva
Norway’s Government Pension Fund Global is the world’s largest SWF, followed by China’s Investment Corporation ($1.33 trillion). The proposed U.S. fund could surpass these.
Image: Canva
Image: Canva
The creation of a U.S. SWF could reshape global markets, but its success will depend on execution, funding mechanisms, and how it aligns with broader fiscal and economic policies.
Image: Canva