Norway's Giant Wealth Fund Just Told The World Bonds Aren't Safe As Before
The world's biggest sovereign wealth fund cutting US Treasury holdings marks a dramatic shift and investors seeking to protect or grow wealth must pay attention.
This is the clear warning from Nigel Green, the CEO of deVere Group, one of the world's largest independent financial advisory organisations, as Norway's $2.3 trillion oil fund confirms plans to slash its government bond exposure and rewrite what "safe" is supposed to mean in a portfolio.
Norges Bank Investment Management, which runs the fund for the Norwegian state, has told the country's finance ministry it wants to cut the government share of its bond holdings from 70% to 50%.
The heaviest reduction falls on US Treasurys, whose weighting would drop from 34.1% to 21.9%.
The proposal lands as long-dated borrowing costs sit at levels unseen in years across major economies.
US 10-year Treasury yields have climbed to their highest since early 2025.
French 10-year yields have pushed above Italy's and Germany's to levels last seen before the 2008 financial crisis, while German 30-year yields have hit their highest since 2011.
Dutch and Spanish 10-year yields have reached their own multi-year highs, and Japan's 10-year yield has broken through 3% for the first time in three decades.
Eurozone inflation ran at 3.3% in August, adding fuel to a sell-off already being driven by deeper structural forces.
Nigel Green argues the fund's own logic, that leaning too heavily on one type of government paper no longer buys the safety it once did, should push everyday investors to ask the same question of their own holdings.
AdvertisementHe also points to the fund's parallel shift toward mortgage-backed securities and corporate credit as a signal of where serious long-term capital is heading.
Nigel Green stresses that the shift underway is about the entire architecture of fixed income investing, not a single asset class falling out of favour.
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