Norway's $2.3 trillion sovereign wealth fund, managed by Norges Bank Investment Management, has proposed reducing the government debt weight in its benchmark bond index from 70% to 50%. This would cut global government bond allocations by about $106 billion, with the majority coming from U.S. Treasuries—an estimated $80 billion reduction. The fund also plans to increase holdings in non-government U.S. fixed-income assets while keeping UK gilt allocations unchanged and raising Japanese government bond exposure by 2.8 percentage points.
Norway’s $2.3 trillion sovereign wealth fund, managed by Norges Bank Investment Management (NBIM), has proposed a major shift in its government bond portfolio to seek higher returns through alternative debt assets. In a letter to the Norwegian Ministry of Finance on Tuesday, NBIM recommended cutting the government debt weight in the fund’s benchmark bond index from 70% to 50%.
According to estimates, the adjustment would reduce the fund’s global government bond allocation by approximately $106 billion, with the bulk of the reduction coming from U.S. Treasuries. The fund currently holds just under 26% of its total assets in fixed-income securities.
NBIM proposed lowering 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, translating to an estimated $80 billion reduction in U.S. Treasury holdings. The allocation to UK gilts would remain unchanged, while the share of Japanese government bonds would rise by 2.8 percentage points. (Jinshi)
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