Norway Wealth Fund Seeks to Cut U.S. Treasurys to 21.9% From 34.1%
Updated
Updated · CNBC · Sep 4
Norway Wealth Fund Seeks to Cut U.S. Treasurys to 21.9% From 34.1%
3 articles · Updated · CNBC · Sep 4
Summary
$2.3 trillion NBIM proposed cutting the government-bond share of its fixed-income benchmark to 50% from 70%, a shift that would gradually reduce U.S. Treasury exposure to 21.9% from 34.1%.
The fund said the change would preserve enough liquidity in market stress while diversifying risk and lifting returns, as high debt loads across developed economies weaken the case for GDP-based bond weighting.
NBIM would also trim euro-area sovereign bonds to 14.1% from 16.8%, raise Japanese government bonds to 7.4% from 4.6%, and increase non-government U.S. fixed income to 27.6% from 16.2%.
Mortgage-backed securities are a key target because NBIM sees them as offering higher premiums and crisis behavior closer to government bonds than corporate debt.
The proposal lands as long-dated Treasury yields sit near decade highs and traditional buyers face pressure, underscoring broader concern over U.S. debt even if economists say NBIM's direct selling impact would be limited.