Alecta Slashes US Treasury Holdings Amid Policy Uncertainty
Swedish pension fund Alecta has significantly reduced its holdings in U.S. Treasuries over the past year. This decision comes amid increasing uncertainty surrounding U.S. political policies. The fund’s Chief Investment Officer, Pablo Bernengo, confirmed that multiple rounds of divestment have occurred since the beginning of 2025, resulting in substantial reductions.
Alecta’s Divestment Details
While Bernengo did not disclose the exact amount of U.S. Treasuries sold, reports indicate that Alecta offloaded between 70 billion and 80 billion Swedish crowns, equivalent to approximately $7.7 billion to $8.8 billion. This divestment was from initial holdings of around 100 billion crowns.
Political and Economic Factors
- Policy Risk: Alecta’s decision reflects concerns over the unpredictability of U.S. policies.
- Budge Deficits: Growing budget deficits and escalating government debt further influence investment strategies.
- Currency Hedge: The fund maintains a high currency hedging ratio against the U.S. dollar to mitigate risks.
The increase in political uncertainty, especially regarding international policy and potential trade tariffs, has raised alarms among investors. Bernengo pointed out that these factors have contributed to the elevated risk associated with U.S. government bonds.
Industry Context
In addition, Danish pension fund AkademikerPension announced plans to sell its own U.S. Treasuries, valued at around $100 million, by the end of January. This move echoes Alecta’s concerns regarding the stability of U.S. government finances.
Alecta’s recent decisions showcase a cautious approach towards U.S. investments, influenced by broader economic and political dynamics. As uncertainty persists, more funds may reevaluate their positions in U.S. Treasuries.
