Nicolai Tangen and Ida Wolden Bache propose reducing U.S. Treasury holdings for Norway's sovereign wealth fund

Norges Bank Investment Management, the world's largest sovereign wealth fund, has proposed a significant reallocation of its bond portfolio to diversify risk and improve returns. The fund's leadership, including CEO Nicolai Tangen and Governor Ida Wolden Bache, recommended reducing the government subindex of its bond holdings from 70% to 50%. This shift would primarily affect U.S. Treasuries, which would decrease from 34.1% to 21.9% of the bond benchmark. The proposal includes offloading approximately $80 billion in U.S. Treasury securities while increasing holdings in other U.S. debt, such as mortgage-backed securities and corporate bonds. The fund aims to capture higher risk premiums and provide a more diversified benchmark. The administration announced that the proposed changes are not yet implemented and will be carried out gradually to manage market impact and transaction costs. The fund's leadership noted that 50% government bond exposure remains sufficient to provide liquidity during market turbulence. The move comes as U.S. national debt reaches $40 trillion and investors face pressure from heavy debt loads in developed economies.

Sources

• Newsweek
  List of Countries and Funds Reducing US Treasuries Around the World
• Reuters
  Norway's $2 trillion sovereign fund proposes deep cuts to US Treasury holdings
• Fortune
  Top sovereign wealth fund may dump $80 billion in Treasury bonds — and load up on riskier U.S. debt
• CNBC
  World's biggest sovereign wealth fund plans to cut U.S. Treasury holdings

---

Paywall and unreadable sources

• WSJ
  Norway’s Massive Oil Fund Proposes Selling Roughly $80 Billion in U.S. Treasurys