Nearly 200 countries and 20 U.S. states have established government-run investment funds to manage their wealth. But could it work for the nation?

President Donald Trump signed an executive order directing the Treasury and Commerce departments to set up a sovereign wealth fund. Here's what that means.

WHAT IS A SOVEREIGN WEALTH FUND? Sovereign wealth funds are investment vehicles owned by countries. Unlike pension funds where people withdraw money for their own spending needs, SWFs are supposed to invest for the collective good of a nation.