Norway’s sovereign wealth fund, which manages more than $2.3 trillion, is considering its biggest bond-portfolio restructuring in years. Norges Bank Investment Management (NBIM) recommended reducing government bonds’ share of the fund’s benchmark bond index from 70% to 50%, a change the Financial Times estimates would reduce global government-bond exposure by about $106 billion, including nearly $80 billion in U.S. Treasuries. The freed capital would primarily move into U.S. mortgage-backed securities (MBS), bonds backed by pools of home loans, and other non-government fixed-income assets offering higher risk premiums. NBIM said agency-backed MBS, primarily guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, have credit quality close to U.S. government bonds but offer somewhat higher yields because of prepayment risk. The proposal would reduce U.S. Treasury exposure by 12.2 percentage points and increase non-government U.S. fixed-income exposure by 11.4 percentage points, while dollar-denominated assets would decline by only 0.5 percentage points. U.K. gilt allocations would remain unchanged and Japanese government bond exposure would rise by 2.8 percentage points. NBIM also proposed a new benchmark based on the Bloomberg Global Aggregate Bond Index, with government and other developed-market bonds each accounting for roughly half, and recommended using outstanding debt market value rather than issuer GDP to determine government-bond weights. The plan remains a recommendation: an expert committee’s full report is expected in January, and Norway’s finance ministry is due to present final recommendations to parliament in spring 2027. The proposal contrasts with Finance Minister Jens Stoltenberg’s comments in April that the fund had no plans to reduce U.S. exposure and that he did not expect major changes. If approved, the shift would represent a notable change in the world’s largest sovereign fund’s approach to Treasuries, even though the proposed reduction would be modest relative to the overall U.S. Treasury market.