Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund, intends to significantly increase its holdings of non-government U.S. fixed income securities. According to CEO Nicolai Tangen and Central Bank Governor Ida Wolden Bache, the target allocation for assets such as corporate bonds is set to rise to 27.6%, up from the current 16.2%.<\/p>\n
The strategy aims to capture higher premiums by diversifying into riskier assets, including mortgage-backed securities. Although these instruments were central to the 2008 financial crisis, fund leadership argues they are well-suited for a long-term investor. Tangen and Wolden Bache noted that mortgage-backed securities often move inversely to equities during market downturns, offering volatility reduction comparable to government bonds.<\/p>\n
The fund currently manages approximately $1.65 trillion in equities, granting it ownership of nearly 1.5% of all shares in globally listed companies, alongside $592 billion in fixed income. Established in 1998 to invest Norwegian oil revenues under strict longevity safeguards, the fund has recently recorded substantial profits driven by investments in U.S. and Asian technology firms and AI-related semiconductor stocks.<\/p>\n
However, Tangen has cautioned that such high returns may not be sustainable if the market declines. The fund experienced a $40 billion loss in the first quarter of 2025 when investor sentiment shifted toward risk-aversion. Additionally, a recent stress test indicated that an AI sector correction could erase $740 billion, or 35%, from the fund’s total value.<\/p>\n","protected":false},"excerpt":{"rendered":"
NBIM plans to raise its allocation to non-government U.S. fixed income to 27.6%, aiming for higher premiums and volatility reduction through assets like mortgage-backed securities.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[92,944,93,945,942,194,941,943],"class_list":["post-372","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-business","tag-fixed-income","tag-markets","tag-mortgage-backed-securities","tag-nbim","tag-norway","tag-sovereign-wealth-fund","tag-us-treasuries"],"_links":{"self":[{"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/posts\/372","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/comments?post=372"}],"version-history":[{"count":0,"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/posts\/372\/revisions"}],"wp:attachment":[{"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/media?parent=372"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/categories?post=372"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yovao.com\/index.php\/wp-json\/wp\/v2\/tags?post=372"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}