Norway’s sovereign wealth fund, managing $2.3 trillion, has proposed reducing its government bond allocation from 70% to 50%, cutting its U.S. Treasury holdings from 34.1% to 21.9% while increasing Japanese government bonds from 4.6% to 7.4%. This reallocation aims to diversify risk and seek higher returns in assets like mortgage-backed securities and U.S. corporate bonds, which would rise from 16.2% to 27.6%. The fund, which holds approximately $1.65 trillion in equities and $592 billion in fixed income, suffered a $40 billion loss in the first quarter of 2025, and a stress test revealed that an AI correction could wipe $740 billion, or 35%, off its value.
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