US President Donald Trump signed an executive order calling for the creation of a Sovereign Wealth Fund (SWF) that directs the Secretary of the Treasury and the Secretary of Commerce to deliver a plan within 90 days for the creation of a sovereign wealth fund.
The Secretary of the Treasury and the Secretary of Commerce will work closely with the director of the Office of Management and Budget and the Assistant to the President for Economic Policy to develop the plan. The Order directs the Secretary to include in the plan recommendations for funding mechanisms, investment strategies, fund structure, and a governance model.
An SWF will help maximize the stewardship of US national wealth as a mechanism to amplify the financial return to a nation’s assets and leverage those returns for strategic benefit and goals. The US can leverage such returns to promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish long-term economic security, and promote US economic and strategic leadership internationally.
The US already holds a vast sum of highly valued assets that can be invested through a sovereign wealth fund for greater long-term wealth generation. The Federal government directly holds $5.7 trillion in assets. Indirectly, including through natural resource reserves, the Federal government holds a far larger sum of asset value.
The United Kingdom recently announced their own plans to pursue development of such a fund. In addition to countries around the world maintaining their own funds, 23 states within our own country maintain their own funds that control in total $332 billion in assets.