While Nordic peers retreat, the world’s largest sovereign wealth fund is doubling down on American debt.
Norges Bank Investment Management (NBIM), which oversees Norway’s $2.2 trillion oil fund, reported that its US Treasury holdings swelled to $199 billion (9.4% of the fund) in the second half of 2025. This buying spree comes despite CEO Nicolai Tangen explicitly flagging concerns about “high sovereign debt levels” in the US.
⚖️ THE MECHANICS OF BUYING: Why buy debt you are worried about?
- The Mandate: The fund operates under a strict Ministry of Finance rule: ~70% Equities / ~30% Bonds.
- The Flywheel: As tech and AI stocks surged (driving a $247 billion profit in 2025), the fund was mathematically forced to sell expensive stocks and buy bonds to maintain its asset allocation.
- The Divergence: This contrasts sharply with neighbors like Sweden’s Alecta and Denmark’s AkademikerPension, which are actively selling US Treasuries due to geopolitical and fiscal risks.
⚠️ THE RISK RADAR: The fund’s latest stress tests paint a stark picture of the threats ahead:
- Global Fragmentation: A breakdown in trade could trigger a 37% drop in fund value.
- AI Correction: An “AI bubble” burst could wipe out 35% (up from 18% in last year’s model).
- Debt Crisis: A regional sovereign debt crisis could cost the fund 32%.
💡 ANALYST TAKEAWAY: Don’t mistake liquidity for conviction. Norway’s accumulation of US debt is a function of its size and success, not necessarily its sentiment. When you manage $2.2 trillion and need to park rebalancing flows, the US Treasury market is often the only bathtub big enough to hold the water. They are effectively recycling AI profits into US deficits because the mandate leaves them no other choice.
👇 Macro Strategists: Is the “60/40” (or 70/30) rebalancing flow from Sovereign Wealth Funds enough to put a ceiling on US yields, regardless of the deficit?