What is a sovereign wealth fund, and which countries have them?

(NewsNation) — President Donald Trump has signed an enforcement order directing the U.S. to commencement processing an American sovereign wealthiness money and said it could beryllium utilized to profit from TikTok.

Trump's caller bid begins the process of creating a sovereign wealthiness fund, which is aimed astatine generating much wealth for the authorities by investing successful assets similar stocks, bonds and existent estate.

"We're going to basal this happening up wrong the adjacent 12 months. We're going to monetize the plus broadside of the U.S. equilibrium expanse for the American people," Treasury Secretary Scott Bessent told reporters Monday.

Specific details were scarce, but Trump suggested the money could beryllium a mode for the U.S. to bargain the societal media level TikTok.

Here's what to cognize astir sovereign wealthiness funds and wherefore Trump wants one.

What is simply a sovereign wealthiness fund?

Sovereign wealthiness funds, SWFs, are concern vehicles owned by countries. Typically, they're acceptable up to negociate state-owned assets, according to the Center for Global Development (CGD), a Washington-based deliberation tank.

Different SWFs person antithetic financial, economical and governmental objectives.

Some relation similar a savings money — nest eggs wherever existent wealth gets invested for aboriginal generations. Those funds person decadeslong concern horizons and are often acceptable up by commodity-rich countries to prevention a information of their assets wealthiness for aboriginal on, according to The International Forum of Sovereign Wealth Funds.

Other sovereign wealthiness funds are intended arsenic stabilization funds, which governments tin gully connected to creaseless the budget.

Many funds person aggregate objectives, mixing stabilization, savings and development.

Trump didn't connection galore details connected the fund's strategical absorption oregon wherever the wealth to commencement it would travel from.

Sovereign wealthiness funds typically commencement with a wealthiness surplus, but fixed the United States fund way record, relying connected hypothetical aboriginal surpluses is unrealistic, experts astatine the CGD wrote successful a caller report.

What does it mean for TikTok?

Trump said TikTok, which is owned by China-based ByteDance, was an illustration of what helium could enactment successful a caller U.S. sovereign wealthiness fund.

"We mightiness enactment that successful the sovereign wealthiness fund, immoderate we make, oregon we bash a concern with precise affluent people, a batch of options," helium said of TikTok. "But we could enactment that arsenic an illustration successful the fund. We person a batch of different things that we could enactment successful the fund."

As 1 of his archetypal acts successful office, Trump directed his Justice Department to intermission enforcement of the TikTok prohibition until aboriginal April. The president has said he's looking to person the U.S. authorities broker a woody for 50% power of the fashionable societal media platform.

In theory, a sovereign wealthiness money is 1 mode the U.S. could get a involvement successful the institution without nationalizing it.

Which countries person sovereign wealthiness funds?

There are implicit 90 sovereign wealthiness funds astir the satellite that negociate implicit $8 trillion successful assets, according to The International Forum of Sovereign Wealth Funds.

Norway's $1.8 trillion sovereign wealthiness money is the largest. The money invests revenues from the nation's lipid and state accumulation and is 1 of the world's largest investors, owning connected mean 1.5% of each stocks listed worldwide, according to Reuters.

The Norwegian fund's existent worth corresponds to astir $321,000 for each man, pistillate and kid surviving successful the state of 5.6 cardinal people.

Other countries with large sovereign wealthiness funds see China, the United Arab Emirates, Kuwait and Saudi Arabia, according to the Sovereign Wealth Fund Institute.

Trump predicted that the U.S. could yet apical Saudi Arabia’s money size.

“Eventually, we’ll drawback it,” helium promised successful the Oval Office connected Monday.

Howard Lutnick, Trump’s prime for Commerce Secretary, added: "The bonzer size and standard of the U.S authorities and the concern it does with companies should make worth for American citizens.”

Which US states person sovereign wealthiness funds?

The U.S. already has 21 sovereign wealthiness funds astatine the authorities level, according to the CGD.

The largest ones are based successful Alaska, New Mexico and Texas and are funded done the proceeds of oil, state and mineral revenue. Those funds are chiefly utilized to wage for in-state programs similar acquisition and authorities authorities operations, CGD said.

The Associated Press contributed to this report.