It wasn’t the only Scandinavian pension fund to divest from US Treasuries. In December, Lærernes Pension, the $25 billion Danish pension fund for teachers, sold some $560 million of US government bonds and reinvested the proceeds into German government bonds.
Alecta, the $156 billion Swedish occupational management company, was also in the news for selling US holdings.
International news media speculated that Europe might be ready to use its holdings of US Treasuries and other financial assets as leverage against the Trump administration’s policies, similar to some of President Donald Trump’s punitive and politically motivated tariff measures.
“Europe owns Greenland, it also owns a lot of Treasuries…for all its military and economic strength, the US has one key weakness: it relies on others to pay its bills via large external deficits”, George Saravelos, global head of foreign exchange research at Deutsche Bank, wrote in a research note.
But others were quick to point out the impracticality of coordinating the disposal of Europe’s roughly $12.6 trillion of US assets.
Pensions’ stand
Perhaps unsurprisingly, the pension funds downplayed the chances of any dramatic moves. Anders Schelde, chief investment officer of AkademikerPension, tells Asia Asset Management that the fund has no immediate plans to further reduce allocations to US Treasuries.
He says the recent decision to reduce US Treasury allocations was “rooted in the poor US government finances, which make us think that we need to make an effort to find an alternative way of conducting our liquidity and risk management. Now we have found such a way and we are executing on that”.
Meanwhile, Pablo Bernengo, chief investment officer of Alecta, says the pension fund cut most of its US government bond holdings in several rounds since the beginning of last year. It held around $11 billion of US government bonds at the end of 2024.
In total, “the reductions constitute the majority of the holdings. We have also continued to maintain a high degree of currency hedging against the US dollar”, Bernengo says.
Lærernes Pension announced in a statement posted on its website that it sold off its US Treasury holdings due to uncertainty about the long-term US debt situation and the independence of the US Federal Reserve.
“We see increasing uncertainty about the US’s long-term debt situation, monetary policy, inflation and the dollar exchange rate,” Morten Malle, investment director at Lærernes Pension, says in the statement.
Sweden’s $51 billion AP2 pension fund tells Asia Asset Management that its exposure to different markets and asset classes is continuously analysed and adjusted based on macroeconomic, geopolitical and market perspectives.
Norges Bank Investment Management, which invests Norway’s $1.9 trillion Government Pension Fund Global, the world’s largest sovereign wealth fund, says the fund is invested according to a benchmark index determined by the finance ministry.
Policies
Many of the US Treasury selloffs were made during 2025, before the escalation of tensions over Greenland.
According to Schelde of AkademikerPension, “going forward we will use cash US dollars, short-dated agency debt and the like. Thus, it is not directly related to the ongoing rift between the US and Europe, but of course that didn’t make it more difficult to take the decision”.
Bernengo says Alecta’s policy on US assets “was and is based on an assessment that the risk in US government bonds and the dollar has increased, which is related to the reduced predictability of the policy pursued in combination with large budget deficits and growing national debt”.
While there is no real sign that European pension funds are making decisions about US assets on anything more than prudent investment considerations, US policies are material to such considerations. Reducing exposure to US assets looks less like retaliation and more like fiduciary responsibility.
