Archive · 5 Sep 2026
Norway’s Pension Fund Proposes Less US Treasury, More Mortgage Debt
Norway has one of the world’s largest investment funds.
Its central bank wants to change how the fund invests in bonds.
The plan would reduce the share invested in government bonds, including US Treasuries.
The US Treasury share would fall from 34.1% to 21.9% of the bond benchmark.
More money would go into mortgage-backed securities and other government-related bonds.
These securities are still linked closely to governments and are considered relatively safe in the proposal.
The fund would keep about the same overall exposure to the US dollar.
Norway’s Ministry of Finance will decide whether the recommendation becomes policy.
Norges Bank proposed reducing government bonds from 70% to 50% of the pension fund’s bond benchmark.
The proposed US government bond allocation would fall from 34.1% to 21.9% of the total bond benchmark.
Agency mortgage-backed securities could rise from zero to about 13% of the benchmark.
Government-related bonds could increase from roughly 4% to around 11%.
The proposal is advisory and must be considered by Norway’s Ministry of Finance.
- Who
- Norges Bank, which manages Norway’s Government Pension Fund Global, made the recommendation to Norway’s Ministry of Finance.
- What
- It proposed restructuring the bond benchmark by reducing government bonds and increasing agency mortgage-backed and government-related bonds.
- When
- The recommendation followed a Ministry of Finance letter dated 25 February 2026; a separate expert report is due by 25 January 2027.
- Where
- The changes concern Norway’s global sovereign wealth fund and its holdings in international bond markets, including US markets.
- Why
- Norges Bank says the fund’s liquidity needs can be met with a smaller government-bond allocation and that market-value weighting would better reflect bond markets than GDP weighting.
- Fund value
- More than $2.3 trillion
- Government bond share
- Proposed reduction from 70% to 50% of the bond benchmark
- US government bond share
- Proposed reduction from 34.1% to 21.9% of the total bond benchmark
- Agency mortgage-backed securities
- Proposed increase from 0% to about 13%
- Government-related bonds
- Proposed increase from about 4% to around 11%
- Overall US dollar exposure
- Projected to remain nearly stable, declining from 52.9% to 52.5%
- Decision authority
- Norway’s Ministry of Finance must decide whether to adopt the recommendation