ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Sovereign Wealth Fund
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Sub-Wealth Fund
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Star Wealth Fund
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State Wellness Fund
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Detailed explanation-1: -A sovereign wealth fund (SWF), also known as a social wealth fund, is the surplus money that a country accrues over time. The government-backed pool of funds is mostly funded from a country’s foreign exchange reserves. Other sources of funds for an SWF account include: Bank reserves.
Detailed explanation-2: -Sovereign wealth funds are state-owned investment funds usually financed by surplus revenues or reserves. They are often created by commodity-rich exporters, such as Norway, Saudi Arabia, and Qatar, to stabilize national budgets, create savings for their citizens, or promote economic development.
Detailed explanation-3: -The world’s largest sovereign wealth fund (SWF) as of December 2022 was China Investment Corporation (CIC), managing assets reaching around 1.35 trillion U.S. dollars. The CIC is used to manage a portion of China’s foreign currency reserves and established in 2007.
Detailed explanation-4: -SWFs invest in a variety of asset classes such as stocks, bonds, real estate, private equity and hedge funds. Many sovereign funds are directly investing in institutional real estate.