Norway's sovereign wealth fund proposes cutting U.S. Treasury holdings

The short version

• Norway's $2.3 trillion sovereign wealth fund recommended reducing government bonds from 70% to 50% of its fixed-income portfolio in a proposal to the country's finance ministry.
• The adjustment would gradually lower its U.S. Treasury allocation from 34.1% to 21.9% while expanding corporate debt, mortgage-backed securities, and Japanese government bonds.
• The proposal awaits consideration by Norway's finance ministry as global markets evaluate shifting demand among major sovereign bondholders.

Key facts

• Norges Bank Investment Management proposed reducing the government bond subindex in its fixed-income portfolio from 70% to 50%.[CNBC]
• Under the recommendation, the fund's holdings of U.S. Treasurys would decline from 34.1% to 21.9%, and euro area holdings would drop from 16.8% to 14.1%.[CNBC]
• The plan would raise the share of non-government U.S. fixed income from 16.2% to 27.6% and increase Japanese government bond holdings from 4.6% to 7.4%.[CNBC]
• Fund leadership proposed switching from GDP-weighting to market-value weighting for government bonds due to elevated debt levels across developed economies.[CNBC]
• The fund manages approximately $2.3 trillion in assets, consisting of about $1.65 trillion in equities and $592 billion in fixed income.[CNBC]

Sources

Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.

• World's biggest sovereign wealth fund plans to cut U.S. Treasury holdingsCNBC