Particle.news
Download on the App Store
9 ARTICLES
·
3h ago

Norway’s Sovereign Wealth Fund Proposes Major Cut to U.S. Treasury Holdings

The fund says a lower government-bond share will boost returns by shifting money into corporate debt, agency mortgage-backed securities and other higher-yielding fixed income.

Following the proposed rebalancing, the fund would see its holdings of U.S. Treasuries trimmed by 12.2 percentage points, while the share of non-government U.S. debt would jump by 11.4 percentage points.
Image
Norges Bank IM says the biggest change to its bond index would be investing in more non-government debt, including mortgage-backed securities, to give it better diversification and exposure to risk premiums.
Image

Overview

  • Norges Bank Investment Management published a letter on Friday, Sept. 4, 2026 recommending that the government-bond share of the fund’s bond benchmark be cut from 70% to 50% to preserve liquidity while seeking higher returns.
  • Under the proposal the weighting of U.S. Treasuries inside the government subindex would fall from 34.1% to 21.9% while U.S. non-government fixed income would rise from 16.2% to 27.6%.
  • News outlet calculations put the likely reduction in U.S. Treasury holdings at roughly $75–$80 billion and the total cut across global government bonds at about $106 billion, with freed capital to flow into corporate bonds and agency MBS.
  • The proposal is advisory: an expert review is expected by January 2027, the Ministry of Finance and parliament will then consider changes in the spring, and any implementation would be phased to limit market disruption.
  • NBIM also wants to switch government-bond weightings from GDP-based to market-value-based to better reflect actual debt issuance, a change that analysts say could signal to other big holders that traditional demand for Treasuries is less certain and that could push Treasury yields higher while boosting demand for corporate and mortgage-backed debt.