The manager of Norway's sovereign fund, Norges Bank Investment Management, which manages $2.3 trillion (R$11.7 trillion), proposed a broad reformulation of the institution's public bond portfolio. The change could lead to a reduction of approximately $80 billion in exposure to US Treasury bonds, while the fund seeks other debt modalities to try to increase its returns.
In a letter sent on Tuesday to the Norwegian Ministry of Finance, Norges Bank Investment Management recommended reducing from 70% to 50% the share of sovereign bonds in the fixed income benchmark index used by the fund.
According to Financial Times estimates, the proposed changes would reduce the fund's allocation to government bonds from different countries by approximately $106 billion, representing a significant reduction in global sovereign debt exposure.
The proposal comes in a context of seeking greater diversification and better returns, with the fund considering alternatives to traditional government bonds as a way to optimize its investment portfolio.
