Norway's Sovereign Wealth Fund Plans to Reduce US Treasury Holdings by Around $80 Billion

BlockBeats News, September 4th, according to the Financial Times, the Norwegian sovereign wealth fund, with assets totaling $2.3 trillion, has proposed adjusting its government bond investment portfolio to seek higher returns by allocating to other types of debt assets. The Norges Bank Investment Management sent a letter to the Norwegian Ministry of Finance on Tuesday, suggesting reducing the weight of government debt in the fund's benchmark bond index from 70% to 50%.

It is estimated that this adjustment will reduce the fund's global government bond allocation by approximately $106 billion, with the majority of the reduction coming from U.S. Treasury bonds. Currently, slightly less than 26% of the fund's overall assets are allocated to fixed-income assets. The Norges Bank Investment Management proposes to decrease the fund's exposure to U.S. Treasuries by 12.2 percentage points while increasing the allocation to non-government U.S. fixed-income assets by 11.4 percentage points, which is estimated to reduce the fund's U.S. Treasury allocation by nearly $80 billion. Furthermore, the fund's allocation to UK government bonds will remain unchanged, while the allocation to Japanese government bonds will increase by 2.8 percentage points.