What would prompt a nation to invest in a sovereign wealth fund (SWF)?

Question

Quizplus · Accepted Answer

A trade surplus would provide a nation with excess foreign currency reserves, which can then be invested in a sovereign wealth fund (SWF) to generate additional income and diversify the country's assets. SWFs can also help manage volatile commodity prices and provide a cushion during economic downturns. Trade deficits, on the other hand, would require a country to borrow from foreign sources to finance its imports, which would not leave much room for investing in a SWF.

What Would Prompt a Nation to Invest in a Sovereign