Norway Wealth Fund Could Cut US Treasury Holdings by $80bn

Norway’s $2.3tn Government Pension Fund Global could reduce its holdings of US Treasuries by nearly $80bn under a proposal from its investment manager to shift money into higher-yielding fixed-income assets.

Norges Bank Investment Management (NBIM) has recommended reducing the share of government bonds in the fund’s bond benchmark from 70% to 50%. The Financial Times estimates that the change could reduce the fund’s global government bond allocation by about $106bn.

Much of the reduced allocation would instead move into other US fixed-income assets, including agency mortgage-backed securities, which generally offer higher yields.

The fund’s overall exposure to the US dollar would be largely unchanged. Holdings of British government bonds would remain stable, while the weighting of Japanese government debt would increase.

NBIM also recommended weighting countries’ government bonds by market value rather than the size of their economies.

The proposal is not final. An expert council is due to submit broader recommendations to Norway’s Finance Ministry by 25 January 2027, with the government expected to present its proposals to parliament in spring 2027.

(seekingalpha, bak)