The proposed reallocation would gradually cut NBIM’s Treasury holdings from 34.1% to 21.9%, reduce its euro area holdings from 16.8% to 14.1%, and increase its share of Japanese government bonds to 7.4% from 4.6%. <\/p>\n
NBIM also wants to begin weighting its government bond holdings by market value instead of GDP because of the high debt loads of almost all developed economies, <\/p>\n
Treasurys under pressure <\/p>\n The potential shift would come at a sensitive time for the Treasury market, with long-dated yields pushed to decade-highs<\/a> as investors fret over the U.S. fiscal trajectory and increasingly heavy debt load<\/a>. <\/p>\n “Reliable buyers and holders of U.S. Treasurys are under pressure,” economist Mohamed El-Erian told CNBC’s Carolin Roth in a Friday interview, citing Japan, China and Gulf countries.<\/p>\n Addressing NBIM’s proposal to reduce its own share of Treasurys, El-Erian said: “The size isn’t big, but the signal that traditional holders and buyers are becoming less reliable is a very important one.”<\/p>\n NBIM plans to increase its holdings of non-government U.S. fixed income, such as corporate bonds, to 27.6% from 16.2%.<\/p>\n CEO Nicolai Tangen and Norway’s central bank chief Ida Wolden Bache said the fund could earn higher premiums by diversifying into riskier assets, such as mortgage-backed securities, which they judge as well-positioned to weather as a long-term investor.<\/p>\n Tangen and Wolden Bache said mortgage-backed securities, made infamous during the 2008 Financial Crisis<\/a>, tend to move in the opposite direction to equities during crises and so could provide an “additional reduction of volatility” more similar to government bonds than corporate bonds. <\/p>\n NBIM currently holds around $1.65 trillion in equities \u2014 with ownership of almost 1.5% of all shares in the world’s listed companies \u2014 and $592 billion in fixed income.<\/p>\n The fund, established in 1998 to invest revenues from Norwegian oil with strict guardrails to preserve its longevity, has made record profits in recent quarters<\/a> from its huge investments in U.S. and Asian tech firms and beneficiaries of the AI boom, such as semiconductor stocks.<\/p>\n However, Tangen has warned that those levels of returns will not be sustainable<\/a> in the case of a market downturn. In the first quarter of 2025, it swung to a $40 billion loss<\/a> as investors turned risk-off.<\/p>\n A recent stress test by NBIM found that an AI correction could wipe $740 billion, or 35%, off its value.<\/p>\n![\"NBIM](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/09\/108348345-17865338951786533891-47724583694-1080pnbcnews.jpg\")
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