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🇬🇷 Greece /Economy & Trade

Norway's sovereign wealth fund moves to reduce bond exposure

From Kathimerini · () Greek

Translated from Greek and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources New plan
  • Norges Bank Investment Management wants to reduce the share of government bonds in its bond portfolio from 70% to 50% and increase exposure to riskier assets.
  • The change could reduce government bond holdings by about $58 billion, including a possible $75 billion cut in U.S. bonds and a $20 billion increase in Japanese government bonds.
  • The proposal comes amid government bond market volatility, rising borrowing costs and concerns over U.S. debt.

Norway's sovereign wealth fund is seeking a major shift away from government bonds as turmoil in global debt markets pushes borrowing costs higher. Norges Bank Investment Management has asked the country's Finance Ministry to reduce government bonds to 50% of its bond portfolio from 70%.

The fund manages a portfolio worth $2.3 trillion and holds about 30% of its assets in bonds, meaning its bond portfolio exceeds $615 billion. Government bonds accounted for 59.5% of that portfolio at the end of June, the latest available data cited in the report.

the best possible

· Nicolai TangenThe NBIM chief executive used the phrase when discussing the fund's record first-half returns.

Bloomberg calculations indicate that the proposed change would cut the fund's government bond holdings by about $58 billion. U.S. bond holdings could fall by $75 billion, while Japanese government bond holdings could rise by $20 billion. Holdings of eurozone government bonds are also expected to decline.

The strategy would increase the fund's exposure to riskier securities. Real estate is another growth area in the new approach. NBIM, established in the early 1990s to invest Norway's oil and gas wealth, invests outside Norway in equities, bonds, real estate and renewable-energy infrastructure.

NBIM is not making a direct assessment of the fiscal sustainability of the United States

· Kenneth CromptonThe National Australia Bank interest-rate strategist described the meaning of the proposed portfolio shift.

The fund follows a benchmark set by Norway's Finance Ministry, and major changes to its investment strategy require parliamentary approval. It reported record returns of $189 billion in the first half of the year, although chief executive Nicolai Tangen called that result "the best possible."

The proposal arrives as the government bond market faces intense disruption. Amid concerns over U.S. debt, which has reached $40 trillion, the yield on the 10-year Treasury rose above 4.75% on Monday for the first time since January 2025. Kenneth Crompton of National Australia Bank said NBIM was not making a direct judgment on U.S. fiscal sustainability. Nick Ferres of Vantage Point Asset Management said debt and deficits were unsustainable in most developed economies, but the supplied article ends before completing his comment.

Debt and deficits are unsustainable in most developed economies

· Nick FerresThe Vantage Point Asset Management investment chief commented on the wider government bond market.
About this summary

Originally published by Kathimerini in Greek. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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