Sovereign wealth funds can be characterized as maximizing long-term return, with foreign exchange reserves serving short-term "currency stabilization", and liquidity management. There have been attempts to distinguish funds held by sovereign entities from foreign-exchange reserves held by central banks. Such investment management entities may be set up as official investment companies, state pension funds, or sovereign funds, among others. These are assets of the sovereign nations that are typically held in domestic and different reserve currencies (such as the dollar, euro, pound, and yen). The accumulated funds may have their origin in, or may represent, foreign currency deposits, gold, special drawing rights (SDRs) and International Monetary Fund (IMF) reserve positions held by central banks and monetary authorities, along with other national assets such as pension investments, oil funds, or other industrial and financial holdings. Other sovereign wealth funds are simply the state savings that are invested by various entities for investment return, and that may not have a significant role in fiscal management. Some sovereign wealth funds may be held by a central bank, which accumulates the funds in the course of its management of a nation's banking system this type of fund is usually of major economic and fiscal importance. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank. A sovereign wealth fund ( SWF), sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds.
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