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
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts