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Norway's $2 trillion sovereign fund proposes deep cuts to US Treasury holdings
The fund said a 50% government-bond share would preserve liquidity and support higher returns as it adds mortgage-backed and government-related debt.
- Norges Bank Investment Management proposed reducing its government bond allocation from 70% to 50%, a shift that would gradually cut Treasury holdings from 34.1% to 21.9% of its portfolio.
- High debt loads across developed economies make GDP-based weighting obsolete, according to Norges Bank Governor Ida Wolden Bache and CEO Nicolai Tangen, who recommend switching to market-value weighting to better manage risk.
- The proposal also reduces euro area government bond holdings from 16.8% to 14.1% while increasing Japanese government bond allocations from 4.6% to 7.4%, and introduces mortgage-backed securities at roughly 13% of the index.
- Economist Mohamed El-Erian told CNBC that while the reduction size is not major, "the signal that traditional holders and buyers are becoming less reliable is a very important one." 30 words, one sentence, exact quote from Statement 5, immediate attribution to El-Erian.
- The Ministry of Finance has commissioned an independent expert group to assess the fund's overall strategy, with findings due by January 2027 to help determine the bond index composition.
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Norway’s $2.3 Trillion Fund Is Cutting Treasuries. Here’s Who’s Left Holding Washington’s Debt
TODAY’S NUMBERS $80bn (Norway fund’s proposed Treasury cut) · 4.79% (US 10-year Treasury yield) · 289t (record Q2 central-bank gold buying) Sovereign money is leaving government bonds for private credit and gold as governments need to borrow more than ever — that’s today’s gap. This week Norges Bank Investment Management, which runs Norway’s $2.3 trillion […]
·Plovdiv, Bulgaria
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With the planned reduction, Norway's SWF wants to strengthen its return.
·Vienna, Austria
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Total News Sources56
Leaning Left1Leaning Right8Center6Last UpdatedBias Distribution53% Right
Bias Distribution
- 53% of the sources lean Right
53% Right
C 40%
R 53%
Factuality
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