DataSpace: Integrated Asset Allocation Strategies: Application to Institutional Investors
A sovereign wealth fund SWF , sovereign investment fund , or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks , bonds , real estate, precious metals , or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank. Some sovereign wealth funds may be held by a central bank , which accumulates the funds in the course of its management of a nation's banking system; this type of fund is usually of major economic and fiscal importance.
A sovereign wealth fund is a state-owned investment fund comprised of money generated by the government, often derived from a country's surplus reserves. SWFs provide a benefit for a country's economy and its citizens. The funding for a SWF can come from a variety of sources. Popular sources are surplus reserves from state-owned natural resource revenues, trade surpluses, bank reserves that may accumulate from budgeting excesses, foreign currency operations, money from privatizations, and governmental transfer payments.