How Changes to Norway's $995 Billion Fund Could Hit Debt Markets
- Proposals include cutting 20 currencies including yen
- U.S. assets, gilts may benefit if portfolio re-weighted
This article is for subscribers only.
Investors may pile into Treasuries and gilts at the expense of Japanese and Chinese debt if a proposal by the world’s biggest wealth fund is implemented.
Norway’s $995 billion sovereign fund is looking at keeping bonds in its benchmark index in just three currencies -- the dollar, the euro and the pound -- at the expense of 20 others. The changes, which will need approval from the next government after Monday’s election, would likely create ripples across bond and currency markets if Norges Bank Investment Management reallocates purchases.