Salar Ghahramani, founder and managing director of Global Policy Advisors and an associate professor of Business Law and International Law & Policy at Penn State Abington, shared his thoughts on the Trump administration’s plan to create a sovereign wealth fund in a Pension & Investments article.

A sovereign wealth fund is a government-controlled investment fund that enables excess capital to be invested.

Earlier this month, President Trump signed an executive order which recommends the federal government to establish a U.S. sovereign wealth fund to “promote fiscal sustainability, lessen the burden of taxes on American families and small businesses, establish economic security for future generations, and promote United States economic and strategic leadership internationally.”

Pension & Investments pointed out that several U.S. states already have sovereign wealth funds, as do countries with significant commodity exports.

“Every single large economy has a sovereign wealth fund and they’ve been strategic tools for decades,” Ghahramani said. “So it would make absolute sense for the U.S. to have at least one sovereign wealth fund given the size of the U.S. economy.”

In December 2024, Professor Ghahramani published an article on the issue in the Yale Journal of International Affairs.

“The United States, given its complex political landscape and the necessity to align its financial strategies with diplomatic priorities, would require a governance structure that accommodates both economic expertise and foreign policy considerations,” Ghahramani wrote.

He noted in the article that questions regarding a governance model include how much independence the sovereign wealth fund should have and how much government oversight is needed to align its activities with U.S. priorities.

“Striking this balance is crucial for ensuring the fund can function efficiently while advancing national interests,” he wrote. “The governance structure must provide enough autonomy to allow financial experts to make sound investment decisions, but it also needs safeguards to ensure these decisions reflect the country’s foreign policy and economic goals.”

“Good sovereign wealth funds, just like any good investor, will try to diversify across asset classes, geographies and even money managers,” Ghahramani added.

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