Norway's Sovereign Wealth Fund Proposes $80 Billion Reduction in U.S. Treasury Holdings

ME News reports that on September 4 (UTC+8), according to the Financial Times of the UK, the Norwegian Sovereign Wealth Fund, which manages assets of $2.3 trillion, has proposed adjusting its government bond portfolio to seek higher returns by allocating to other types of debt instruments. On Tuesday, Norges Bank Investment Management sent a letter to the Norwegian Ministry of Finance recommending that the weight of government debt in the fund’s benchmark bond index be reduced from 70% to 50%. This adjustment is estimated to reduce the fund’s global government bond exposure by approximately $106 billion, with the majority of the reduction coming from U.S. Treasuries. Currently, fixed-income assets account for just under 26% of the fund’s total assets. Norges Bank Investment Management proposes reducing the fund’s exposure to U.S. Treasuries by 12.2 percentage points while increasing its allocation to non-government U.S. fixed-income assets by 11.4 percentage points—an adjustment estimated to reduce the fund’s U.S. Treasury holdings by nearly $80 billion. Additionally, the fund’s allocation to UK gilts will remain unchanged, while its allocation to Japanese government bonds will increase by 2.8 percentage points. (Jinshi) (Source: ODAILY)