Finance
Sovereign Wealth Fund
Definition
A state-owned investment fund financed by government revenue, typically from commodity exports, used to invest in global assets for future generations.
Explanation
The world's largest sovereign wealth fund is Norway's Government Pension Fund Global ($1.7T+), funded by oil revenue. Other major funds include Abu Dhabi Investment Authority, China Investment Corporation, and Saudi Arabia's Public Investment Fund. SWFs serve as stabilization buffers and intergenerational wealth transfer mechanisms. They collectively manage over $10 trillion globally.