A sovereign wealth fund often serves as a vehicle to invest a government’s budget surplus. The U.S. doesn’t have that luxury.

Sovereign wealth funds have been around for generations, and President Donald Trump wants the federal government to join in on the trend. But there are a few problems — namely, it’s never been done in a democracy as complex as the United States.

Should the U.S. create a sovereign wealth fund in line with President Donald Trump's executive order this week, it would be an unusual one among those already established by other countries.

Washington may not have a sovereign wealth fund, but almost half the U.S. states do. Indeed, the earliest precursor of a national sovereign wealth fund was established in the United States: in 1803, Ohio created a land trust to finance public education in the state.

Effectively, it's a government-run hedge fund that invests in assets like stocks, bonds, real estate, and infrastructure. It's a fairly straightforward process: the government provides funds, and the SWF invest it into risky assets to try to earn profits. This is the same as any investment company, only that its sole investor is the government.

President Donald Trump signed an executive order last week to create a sovereign wealth fund, similar to those of nations in the Middle East, Europe and Asia. The funds, which typically use surplus wealth, operate by making direct investments (like stock, bonds, real estate, equity funds, etc.) with government dollars.

Danantara Indonesia will invest $20 billion in a wide range of projects from metal processing to artificial intelligence, President Prabowo Subianto said on Monday, as he launched the country's new sovereign wealth fund.

Indonesia on Monday launched a new sovereign wealth fund that will aim to manage state assets worth more than $900 billion as President Prabowo Subianto looks to turbo-charge growth in