The case against a US sovereign wealth fund

William L. Megginson, Xin Yue Zhou and Robert L. Gholson

The Financial Review, 2025, vol. 60, issue 1, 5-12

Abstract: Sovereign wealth funds (SWFs), with assets under management reaching over $12.9 trillion in 2024, remain prominent global investors. The idea of creating a US national SWF gained attention during the 2024 US national elections, prompting debates about its merits. This paper reviews the latest academic research on SWFs and examines whether the United States should establish its own national SWF. We argue against this proposition for three key reasons: a US SWF is unnecessary due to the efficiency of existing capital markets, politically infeasible given deep partisan divides, and fiscally imprudent given the nation's significant debt and budgetary constraints.

Date: 2025
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