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%.
He says: “One of the most disciplined, longest-horizon investors on the planet is publicly rethinking how much trust it puts in government debt, and US Treasurys above all, to do the job investors have counted on them to do for generations.”
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.
He says: “When French borrowing costs run hotter than Italy’s, and Japanese yields reach levels nobody trading today has ever lived through, there’s a genuine repricing of risk running through government debt markets everywhere at once, not a problem contained to one country.”
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.
He says: “For generations, government bonds were the automatic answer to where you park safe money.
“A fund this size, this careful, and this well-resourced, has just told the world that answer needs rewriting.
“Investors still treating sovereign debt as risk-free purely out of habit are working from an assumption that’s ageing fast.”
He 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.
He says: “Diversifying away from a single type of government paper and into a broader mix of credit and fixed income is the direction thoughtful, long-term investors are already moving.
“And, as such, those portfolios still built on old assumptions about what counts as safe are the ones most exposed if this shift keeps gathering pace.”
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.
He says: “This isn’t one bad quarter for bonds. Something structural has changed in who’s willing to hold government debt, on what terms, and for how long.
“Investors who treat duration, currency exposure and issuer concentration as afterthoughts are the ones who’ll feel this hardest.”
The deVere CEO concludes: “Governments everywhere are issuing more debt than the traditional buyer base can comfortably absorb, and the world’s most careful long-term investor, Norway’s mammoth sovereign wealth fund, has just shown its hand on what it plans to do about that.
“Every investor now needs to ask themselves the same question.”
