Trump releases the sovereign wealth fund: What do you know

President Donald Trump On Monday, an executive order that directs its administration to establish a sovereign wealth fund (SWF) to the United States, which the White House says “will help increase the supervision of our national wealth.”

Is Is Directs Treasury Secretary Scott Bessin The Minister of Commerce, Howard Lootnick, to present a plan within 90 days to create the fund.

So what is the sovereign wealth box, and how does it work?

Sovereign wealth funds are investment compounds owned by countries. Most of them are like Investment accountAs a development tool, or a mixture of the two. It is designed to be a nest egg, allowing the presentation of current funds in a way that benefits future generations.

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Unlike pension funds where people pull money to meet their spending needs, SWFS is supposed to invest for the collective goodness of the nation.

This may mean things such as airport building financing or school. But SWFS often puts money in financial products and purchasing risks in companies, which can provide good financial benefits in the future and financing government budgets or social programs.

Trump suggested that the United States could It acquired a 50 % stake in TiktokFor example, which will be held in the next SWF in America.

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There are more than 90 such boxes around the world, and it runs more than $ 8 trillion of assets, according to the International Sovereign Wealth Boxes Forum. The UK recently announced its own plans to follow up the SWF formation.

In the United States, 23 states maintain its own money, which controls a total of $ 332 billion of assets, according to the White House.

Some or every surplus of the country budget is usually passed to SWF, which then can use new investments.

However, the United States is constantly running a budget deficit in recent years.

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Several boxes have been created by countries with strong commodity export industries, and returns from oil and natural gas sales, minerals and minerals by state -owned companies behind SWFS. About 60 % of the funds are funded by revenue from natural resources, according to the International Forum for sovereign wealth funds.

Reuters contributed to this report.