Norway's sovereign wealth fund plans to trim U.S. Treasury holdings by approximately $80 billion

Odaily News: According to the Financial Times, the manager of Norway's $2.3 trillion sovereign wealth fund has proposed adjusting its government bond portfolio in an effort to boost returns by allocating to other types of debt assets. Norges Bank Investment Management wrote to the Norwegian Ministry of Finance on Tuesday, recommending that the weighting of government debt in the fund's benchmark bond index be reduced from 70% to 50%. This adjustment is estimated to lower the fund's global government bond allocation by approximately $106 billion, with the majority of the reduction coming from U.S. Treasuries.

Currently, slightly less than 26% of the fund's total assets are allocated to fixed-income instruments. Norges Bank Investment Management proposes cutting the fund's exposure to U.S. Treasuries by 12.2 percentage points while raising its holdings of non-government U.S. fixed-income assets by 11.4 percentage points, which is estimated to reduce the fund's allocation to U.S. Treasuries by nearly $80 billion. In addition, the fund's allocation to U.K. gilts will remain unchanged, while its allocation to Japanese government bonds will rise by 2.8 percentage points. (Jin Shi)