Norway Wealth Fund Proposes $80B Treasury Cut

Norges Bank Investment Management, the manager of Norway's sovereign wealth fund, has proposed reducing its holdings of United States government debt. The fund recommended lowering its benchmark bond index weighting for government bonds from seventy percent to fifty percent, with U.S. Treasuries facing the largest reduction. The proposed changes would cut nearly eighty billion dollars from the fund's current holdings of about two hundred fifteen billion dollars in U.S. Treasuries, based on data recorded at the end of June. Norges Bank Governor Ida Wolden Bache and CEO Nicolai Tangen outlined recommendations to drop the bond index weighting dedicated to U.S. government bonds from thirty-four point one percent to twenty-one point nine percent. The restructuring intends to diversify sources of returns and shift capital into alternative fixed-income assets, including non-government debt and mortgage-backed securities. The proposed allocation to U.S. non-government debt would expand from sixteen point two percent to twenty-seven point six percent. Fund representatives stated that any adjustments would be executed gradually to limit transaction costs and market disruptions. The proposals have been submitted to Norway's finance ministry for review.