Norway cuts $80 billion Treasury bond holdings to 50% from 70%
The Norwegian Government Pension Fund Global has proposed reducing its US Treasury bond holdings by approximately $80 billion, bringing the allocation down to 50% of its fixed-income index.
The world's largest sovereign wealth fund is restructuring its portfolio after a period of market turbulence. A recent letter from the investment management department at Norges Bank advises a significant reduction in U.S. Treasury bond positions. The total holdings have dropped from roughly $215 billion by the end of June to an expected level around $135 billion following these changes. This strategic shift aims to improve returns and address investor concerns regarding rising long-term borrowing costs driven by inflation fears. Consequently, the weight of government bonds in the fund's standard bond index is being adjusted from 70 percent down to 50 percent. The proposal targets a reduction of nearly $80 billion specifically within U.S. Treasury securities. While the fund manages approximately $2.3 trillion in assets overall, this specific move highlights a major reallocation from traditional safe-haven assets amid evolving economic conditions.
