Sweden Scales Back Investments in US Treasury Bonds

Sweden’s pension fund Alecta has significantly reduced its holdings of U.S. Treasury bonds over the past year, citing rising risks and growing unpredictability in U.S. economic and fiscal policymaking.

According to the fund, the sell-off was carried out in several phases starting in early 2025 and accounted for the majority of its U.S. Treasury exposure. Despite the reduction, Alecta maintained a high level of currency hedging against the U.S. dollar.

Pablo Berningo, Alecta’s Chief Investment Officer, said the decision was driven by a reassessment of risk rather than short-term market movements, pointing to heightened uncertainty surrounding U.S. policies.

While the fund did not disclose the exact value of the divestment, Swedish business daily Dagens Industri reported that Alecta sold between 70 billion and 80 billion Swedish kronor ($7.7–$8.8 billion) out of total U.S. Treasury holdings of approximately 100 billion kronor.

In a statement, the fund said the move reflects increased risk in U.S. bonds and the dollar, citing limited predictability in U.S. fiscal policy, a widening budget deficit, and the continued rise in government debt levels.

Alecta’s decision comes amid a broader reassessment of U.S. assets among Nordic institutional investors. In a similar move, Danish pension fund AkademikerPension announced that it plans to sell its U.S. Treasury holdings, valued at around $100 million, before the end of the month.

AkademikerPension said its decision was based on concerns over the weakening fundamentals of U.S. public finances, reinforcing growing investor unease about long-term debt sustainability in the world’s largest economy.