TradeAlmanac
Sign in

Sovereign wealth fund

A state fund that accumulates part of commodity or budget revenue and covers deficits out of it in bad years.

How to read the number

It works as a buffer between the external price of a commodity and domestic spending: while the fund is being topped up, the budget and the currency depend less on the commodity cycle.

When the metric lies

The announced size of a fund and its liquid part are different numbers — some of it is already invested in assets that cannot be sold quickly.

Also known as: national wealth fund

Related terms