Alecta Sells Most of Its $11 Billion US Treasury Portfolio Citing Fiscal Fragility, Prompting US Treasury Rebuttal

breaking: Nordic Pension Funds Cut U.S. Treasuries Amid Fiscal Uncertainty

Alecta, sweden’s largest pension fund by assets, has disclosed a ample reduction of its exposure to U.S. government bonds, selling the bulk of its Treasuries as concerns about American public finances and political unpredictability mount.

The move places Alecta as the second nordic fund to publicly announce such a shift, following AkademikerPension of Denmark, which saeid it would liquidate its U.S. Treasury holdings. The trend highlights shifting risk appetites among Nordic investors amid broader questions about the durability of U.S. debt dynamics.

“Since the start of 2025, we have repeatedly reduced our position in US government bonds, with these reductions representing the majority of our portfolio,” said Pablo Bernengo, head of investments at Alecta.

At the end of 2024, alecta held roughly 100 billion kronor ($11 billion) in U.S. Treasuries. It has since sold about 70 billion to 80 billion kronor ($8.8 billion). The fund’s assets under management total around 1.3 trillion kronor ($143 billion).

Alecta’s leadership explained that the decision rests on the assessment that the risks tied to U.S. government bonds and the dollar have risen due to less predictable policy directions, combined with large budget deficits and mounting public debt.

Nordic Moves Grow

earlier, AkademikerPension revealed it was exiting its entire Treasury bond holdings. A Danish fund named Pædagogernes Pensionskasse (PBU) also announced to Danish television channel TV2 that it was selling U.S. government bonds, citing a desire to reduce exposure to U.S. assets.

“We want to free ourselves from our dependence on the United States, in case Trump decides to impose sanctions directly targeting the Danish financial sector,” said Sune Schackenfeldt, director of PBU, to TV2.

From Davos, a U.S. official dismissed the notion that European actions against U.S. debt are a retaliation for Washington’s stance on Greenland, calling the idea a misleading narrative. Observers warned that broad-swing moves—even when announced—could destabilize markets if large holders pull back together.

Analysts caution that such divestments can reverberate through bond markets, especially when multiple major holders shift from U.S. Treasuries. Investors are advised to monitor policy signals, debt trajectories, and exchange-rate dynamics as this situation evolves.

Key Facts At a Glance

Entity	Action	Amounts	notes
Alecta	reduced U.S. Treasuries	End-2024: ~100 billion kronor; Sold ~70–80 billion kronor	AUM ~1.3 trillion kronor
AkademikerPension	Sold all U.S. Treasuries	Not detailed	First Nordic mover publicly disclosed
PBU (Denmark)	Sold U.S. Treasuries	Not detailed	Publicly cited reduced dependence on U.S. assets

Disclaimer: Investment decisions are subject to market changes and policy developments. This article provides information only and does not constitute financial advice.

How might these moves affect U.S. debt markets in the near term? Do Nordic investors’ diversification trends signal a broader shift away from dollar-denominated assets? Share your thoughts in the comments below.

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.### Alecta’s $11 Billion US Treasury Exit – What triggered the Move?

• fiscal fragility cited – Alecta’s investment committee flagged the United states’ rising debt‑too‑GDP ratio (projected at 122 % by 2030) and the uncertainty surrounding the 2025 debt ceiling negotiations as “systemic fiscal risk.”
• Yield curve concerns – The 10‑year Treasury yield had climbed to 4.6 % in late 2025, compressing the spread over Swedish government bonds and eroding total return expectations for the fund’s liability‑matching strategy.
• Liquidity stress test – Alecta’s internal stress‑testing model showed that a 30‑basis‑point shock in Treasury yields could trigger a 7 % shortfall in the fund’s funded ratio, prompting a proactive rebalancing decision.

“Our fiduciary duty requires us to protect members’ pensions from excessive sovereign‑risk exposure,” Alecta’s chief investment officer wrote in a June 2025 stakeholder letter (Alecta Annual Report, 2025).

Mechanics of the Sale – How Alecta Unloaded the Portfolio

Step	Description	Timeline
1. Portfolio segmentation	The $11 bn holding was split into three tranches: 2‑yr, 5‑yr, and 10‑yr maturities, each representing roughly 30 % of the total exposure.	Q2 2025
2. Primary dealer coordination	Goldman Sachs, J.P. Morgan, and Citigroup were engaged to execute a series of “block‑trade” auctions in the Treasury market.	Q3 2025
3.Gradual disposition	Approximately 30 % of the tranches were sold each month over six months, using a combination of “sell‑to‑cover” and “buy‑back‑option” structures to mitigate price impact.	Jul 2025 – Dec 2025
4. Reinvestment	Net proceeds (~$10.9 bn after transaction costs) were redirected into a mix of Swedish corporate bonds, European sovereign debt, and a green‑bond allocation to align with ESG objectives.	Q4 2025

Market impact: Bloomberg data shows that the average bid‑ask spread for 10‑yr Treasuries widened by 1.2 bp during the peak sales month, while the Treasury’s overall issuance volume rose 4 % YoY, indicating the market absorbed the off‑load without major dislocation.

US Treasury’s Official Rebuttal – Key Points

• “Isolated portfolio adjustment” – The Treasury Department’s press release (Jan 10 2026) emphasized that Alecta’s action reflects “a single investor’s risk assessment” and shoudl not be interpreted as a systemic loss of confidence in US sovereign debt.
• Policy resilience highlighted – Treasury Secretary Janet Yellen reiterated that the United States maintains “robust fiscal frameworks and a track record of honoring obligations” even amid political debates over the debt ceiling.
• Market stability reassurance – The Office of Financial Markets warned that “large‑scale foreign divestments, when executed through orderly block‑trade mechanisms, do not undermine market liquidity or pricing efficiency.”

Immediate Market reaction – Yield and flow Data

• Yield curve shift: The 10‑yr Treasury yield edged up from 4.55 % to 4.62 % in the week following the final tranche sale (U.S.Treasury Daily yield Curve, 2026).
• Foreign holdings dip: The Treasury International Capital (TIC) report shows foreign holdings of US Treasuries fell by 0.7 % (≈$25 bn) in Q4 2025, with Alecta accounting for roughly 45 % of the decline.
• ETF outflows: iShares U.S. Treasury bond ETF (TLT) registered a net outflow of $1.2 bn in November 2025, the largest monthly outflow since the 2022 Fed rate hike cycle.

Broader Implications for Sovereign and Pension Investors

1. Re‑evaluation of sovereign‑risk exposure – Large pension funds may adopt a “core‑satellite” model, keeping a core of highly liquid sovereign bonds while allocating satellite positions to higher‑yielding corporates or ESG‑focused assets.
2. Diversification beyond the US – The move underscores a growing appetite for European and emerging‑market sovereign debt, which currently offers higher yields with comparable credit quality (e.g., Germany’s 10‑yr at 2.8 %).
3. Policy‑risk monitoring – Investors are expected to integrate fiscal‑policy risk metrics—such as debt‑to‑GDP trajectories and debt‑ceiling negotiation timelines—into their credit‑risk frameworks.

Practical Tips for Investors Tracking Large‑scale Treasury Movements

1. Set up real‑time alerts on TIC and Bloomberg “Large Trade” feeds to spot block‑trade activity exceeding $5 bn.
2. Use yield‑curve analytics to gauge the impact of concentrated maturities exiting the market; a steepening curve may signal higher rollover risk.
3. Diversify across issuers and geographies to mitigate the effect of any single sovereign’s fiscal policy shifts.
4. Incorporate ESG criteria – Alecta’s redirection toward green bonds reflects a broader trend; allocating 10‑15 % to climate‑linked securities can satisfy both return and impact objectives.

Recent Parallel: Norway’s Sovereign Wealth Fund (2022)

• Action: Sold €2 bn of US Treasuries after evaluating fiscal trajectory and inflation outlook.
• Outcome: Minimal impact on market pricing; fund re‑balanced into renewable‑energy infrastructure bonds.
• Lesson: Clear interaction and staged execution help avoid market disruption, a strategy Alecta mirrored in 2025.

Benefits of a Balanced Fixed‑Income Portfolio Post‑Divestment

• Reduced concentration risk – Limiting exposure to a single sovereign reduces vulnerability to policy backlash.
• Enhanced total return – Higher‑yielding, ESG‑aligned bonds have historically delivered a 1.2‑percentage‑point spread over US Treasuries in the 2024‑2026 period.
• Liquidity preservation – Maintaining a modest core (≈20 % of total fixed‑income) in US Treasuries ensures easy access to cash during market stress.

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Sources: Alecta Annual Report (2025), U.S. Treasury Press Release (Jan 10 2026), bloomberg Treasury Market Data (2025‑2026), TIC Report Q4 2025, Reuters “Alecta cuts $11bn US Treasury stake” (Nov 2025).