President Donald Trump’s executive order to create a plan for a U.S. sovereign wealth fund would follow those of Norway, Saudi Arabia, China and others.

Trump’s executive order creates a sovereign wealth fund to invest in key sectors and possibly acquire TikTok. Here’s how sovereign wealth funds work.

A sovereign wealth fund of the kind proposed by President Trump, likely funded by debt and primarily investing in domestic assets, violates nearly all of the principles that usually undergird the asset class.