Norges Bank proposes cutting U.S. Treasury holdings from 34.1% to 21.9%
Norway's sovereign wealth fund recommends reducing its bond portfolio exposure to U.S. Treasurys, shifting focus toward Japanese government bonds and reweighting allocations by market value.
The heads of Norges Bank Investment Management (NBIM) proposed in a letter to the Norwegian finance ministry that it cut its holdings of U.S. Treasurys from 34.1% to 21.9%. This plan involves reallocating funds within the fund's $2.3 trillion portfolio. The proposal aims to diversify risk exposure and improve returns by shifting focus to other government bonds. Japanese government bond holdings would rise from 4.6% to 7.4%. European central bank deposits held in the euro area would fall from 16.8% to 14.1%. Instead of calculating weightings based on Gross Domestic Product, the fund intends to use market value as the basis for government bond allocations. This decision targets a period where long-dated U.S. Treasury yields have reached decade highs due to concerns over U.S. fiscal policy and increasing debt loads.
