US government bonds are no longer treated as an automatic “safe haven” by some Nordic pension investors, as concerns over Washington’s fiscal trajectory and policy unpredictability push institutions to reassess long-term risk.
Sweden’s Alecta has sold most of its US Treasury holdings in several rounds since early 2025, while Denmark’s Akademikerpension has said it will sell its remaining US government bond holdings — about DKK 690 million (€92 million). The argument is not that Treasuries have lost their role in global markets, but that the balance of risks has shifted: large budget deficits, a rising debt burden, currency volatility and political pressure on institutions are becoming harder to ignore.
The United States’ total gross debt stood at $38.48 trillion on 20 January 2026, according to the US Treasury’s daily “Debt to the Penny” data — a scale that keeps fiscal sustainability and interest costs at the centre of market debates.
Alecta’s US Treasury sale reflects concerns over predictability
Alecta, one of Sweden’s largest pension institutions, said it has reduced its holdings of US government bonds since the start of 2025. In a statement reported by Reuters, Chief Investment Officer Pablo Bernengo said the reductions account for “the majority” of the fund’s holdings, and added that Alecta has kept a high currency-hedging ratio against the US dollar.
Alecta did not disclose the amount sold. However, Swedish business daily Dagens Industri reported that the fund sold SEK 70–80 billion in US Treasuries over the last year. That is roughly €6–7 billion, depending on exchange rates.
Danish pension funds also trim exposure to US government bonds
In Denmark, Akademikerpension said it will sell its remaining holdings of US government bonds — roughly DKK 690 million (€92 million) — citing concerns about the long-term sustainability of US public finances. The fund’s investment director, Anders Schelde, said the decision is rooted in a financial assessment and not taken as a direct response to the current political split between the USA and Europe, while acknowledging it did not make the choice harder.
Other Danish pension funds have reduced Treasury exposure in recent years. According to calculations by the industry association Insurance & Pensions (Forsikring & Pension), based on Denmark’s central bank data, Danish insurance and pension firms held investments worth DKK 5,093 billion (€683 billion) at the end of November 2025. Of that, DKK 1,360 billion (€182 billion) was invested in the United States. Bonds accounted for DKK 156 billion (€21 billion), including DKK 33 billion (€4.4 billion) in government bonds.
Why the “safe haven” label is being questioned
Economist Jeppe Juul Borre of AL-Sydbank told DR that US Treasuries still function as a safe haven for many investors, but that the current situation is unusual because the USA itself is increasingly seen as a source of uncertainty.
He pointed to three drivers behind the reassessment:
- Debt and deficits: the scale of US borrowing raises doubts about long-term fiscal sustainability.
- Currency exposure: a weaker dollar can change returns for euro- and krona-based investors, and hedging can become costlier.
- Federal Reserve independence: political pressure on the central bank is seen as a risk to inflation and the credibility of interest-rate policy.
For long-term investors like pension funds, these risks matter because they shape returns over decades, and because Treasuries are often used as a portfolio stabiliser. If the stabiliser becomes more volatile, reallocations become rational even when they are gradual.
Europe’s exposure to US debt keeps the issue close to home
The Nordic moves matter beyond Scandinavia because Europe is deeply entangled with US public debt and dollar markets.
US Treasury International Capital (TIC) data for November 2025 lists several European countries and financial centres among the biggest holders of Treasury securities, including the United Kingdom, Belgium, Luxembourg, France, Ireland, Norway and Germany. In the same month, foreign holdings of US Treasuries reached a record $9.355 trillion, Reuters reported.
This does not suggest an imminent European sell-off. But it does underline the strategic sensitivity of US fiscal credibility: Treasuries are widely used as collateral, and shifts in US policy or institutional trust can ripple through European portfolios and pension savers’ long-term returns.
Washington’s response and the signal to European investors
US Treasury Secretary Scott Bessent dismissed the Danish sales in comments to journalists in Davos, saying Denmark’s holdings were “irrelevant” and that he was not concerned. The tone matters for European investors because it reinforces a perception that political friction can spill into economic and market narratives.
In market terms, the impact of these Nordic sales is limited. As a signal, however, it is more significant: some European pension funds are starting to treat US government bonds as a position that must be justified — not assumed.
