What is a sovereign wealth fund?

A sovereign wealth fund (SWF) is a state-owned investment fund that is used to manage a country’s reserves and assets. These funds are typically generated from surpluses in the government’s budget, such as oil revenue, foreign exchange reserves, or other sources of national wealth. Sovereign wealth funds invest in a variety of assets, including stocks, bonds, real estate, and infrastructure projects, both domestically and abroad. The goal of a sovereign wealth fund is to diversify a country’s income sources and ensure long-term financial stability by saving and investing the country’s wealth for future generations.