Sovereign wealth fund
Also known as: SWF
A sovereign wealth fund is an investment fund owned by a national government, typically funded by the country does not need for immediate spending, such as surplus oil and gas or foreign currency reserves built up through trade surpluses. Rather than sitting idle, that money is invested across global , , real estate, and private companies to grow national wealth over the long run.
Some of the largest sovereign wealth funds belong to oil exporting nations such as Norway, Saudi Arabia, and the United Arab Emirates, along with trade surplus economies like Singapore and China. Their investment horizons tend to be extremely long, since the money is not tied to near term the way a 's is, which lets them take large, patient positions in both public markets and private deals.
Because sovereign wealth funds manage enormous sums, often hundreds of billions of dollars each, their investment decisions can move markets and their willingness to invest in a country or company is sometimes read as a vote of confidence. Their government ownership also means their investments occasionally draw political scrutiny, particularly when a fund seeks a large stake in a strategically sensitive company or .