NEW YORK ( TheStreet) -- "What is a sovereign wealth fund?" asked one of my colleagues the other day. "Good question," I countered, and then I began to stumble through a rough answer of what I could remember about these types of funds.
Checking with Investopedia I reacquainted myself with the correct answer. A sovereign wealth fund is "a pool of money derived from a country's reserves, which are set aside for investment purposes that will benefit the country's economy and citizens.
"The funding for a sovereign wealth fund (SWF) comes from central bank reserves that accumulate as a result of budget and trade surpluses, and even from revenue generated from the exports of natural resources."
The nation with the world's largest SWF ($682 billion), built from its vast oil and natural gas resources, is
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