Sovereign Wealth Fund

A Sovereign Wealth Fund (SWF) is a state-owned investment fund that invests a country’s surplus revenues in global financial assets such as stocks, bonds, and real estate. These funds are typically derived from commodity exports, such as oil or gas, or from foreign currency reserves. SWFs are designed to manage the wealth of a nation and provide financial stability for future generations, often focusing on long-term returns and diversification across asset classes.

Example

Norway’s Government Pension Fund Global is one of the largest sovereign wealth funds, investing oil revenues into a diversified portfolio of global assets to ensure the country’s wealth is preserved for future generations.