Is it similar to TN? Other countries?

On Monday, President Donald Trump signed his latest executive order, to create the nation’s first sovereign wealth fund.

If created, this sovereign wealth fund would make the United States similar to other countries, particularly in the Middle East and Asia, that have launched similar funds that make direct investments with government dollars, reported Reuters.

States, like Tennessee, also have similar funds that take state surplus funds and invest the money to help fund things like state retirement programs and such.

Many countries that have these types of funds at the government’s disposal. But unlike these other countries, the U.S. runs on a deficit. So where are the funds for something like this going to come from?

How would the United States create a sovereign wealth fund?

“Obviously you can’t establish an institution by executive order and more to the point is you can’t fund an institution by executive order,” Clemence Landers, a former Treasury official who is now with the Center for Global Development, told Reuters.

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The executive order itself is pretty sparse, with the directive stating that the Secretary of the Treasury Scott Bessent would come up with a plan in a 90-day time frame that would include recommendations on “funding mechanisms, investment strategies, fund structure, and a governance model.”

Bessent, who was alongside Trump during the executive order signing, said the fund will be operational within the next year.

But something like this would most likely need Congress to back it, especially with an unclear funding source, Reuters reported.

How would a sovereign wealth fund be funded?

One of the ideas Trump raised during his campaign for the White House was this sovereign wealth fund and, at the time, stated it could be funded by “tariffs and other intelligent things.”

On Monday, Trump did not give any clear indication of how funds would be gathered for it, but Bessent gave at least some insight, “there’ll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people.”

“We’re going to monetize the asset side of the U.S. balance sheet for the American people,” Bessent told reporters.

What will the sovereign wealth fund be used for?

During the signing of the executive order on Monday, Trump didn’t give any concrete items the fund would be used for, but did cite the possibility of it being used to buy TikTok.

“We’re going to be doing something, perhaps with TikTok and perhaps not, if we make the right deal,” the president told reporters on Monday. “But I have the right to do that and we might put that in the sovereign wealth fund.”

Does Tennessee have a sovereign wealth fund?

Tennessee has a similar fund called the State Pooled Investment Fund or SPIF and also has the Local Government Investment Pool, which provides short-term cash management to local governments.

As of 2024, the SPIF had a monthly average balance of around $35.4 billion, included in it are the state’s cash, dedicated reserves and trust funds, and the balance of the LGIP of around $5.8 billion, according to the Tennessee Department of the Treasury website.

How many countries have a sovereign wealth fund?

If the United States creates one, it would join a group of 90 countries that have these types of funds around the world, according to Reuters. This includes countries like China, Saudi Arabia, Kuwait, Norway, Singapore, Turkey and South Korea.

The world’s largest sovereign wealth fund is the Norway Government Pension Fund Global, which contained more than $1.7 trillion as of January, according to Investopedia.

Here are the top 10 largest sovereign wealth funds in the world, according to the Sovereign Wealth Fund Institute.