A Danish pension fund grabbed attention Tuesday by announcing plans to exit its U.S. Treasury holdings, a move that some observers linked to President Trump’s intensifying dispute with Denmark over Greenland.
But AkademikerPension is not pulling out of U.S. assets. Instead, it is shifting into other dollar-denominated instruments, including dollars and short-dated securities issued by U.S. housing agencies and government-backed mortgage institutions. This means the move more of a rotation within American fixed income than a “Sell America” statement.
AkademikerPension said it will sell roughly $100 million in Treasuries, citing concerns about U.S. government finances.
Anders Schelde, the fund’s chief investment officer, told Barron’s that the decision is “thus not directly related to the ongoing rift between the U.S. and Europe,” though he added that the Greenland tension “didn’t make it more difficult to take the decision.”
But even that explanation is doubtful. If the fund were concerned about the safety of Treasuries, buying the assets of government-sponsored housing finance companies would do nothing to hedge against U.S. sovereign risk.
In market terms, the sale is negligible. The U.S. Treasury market totals about $30.3 trillion outstanding, and trading runs at roughly one trillion dollars per day on average, making AkademikerPension’s liquidation essentially a rounding error.
The fund said it has used Treasuries for years as a liquidity and risk hedge alongside U.S. investment-grade and high-yield credit, as well as emerging-market debt.
Denmark is also a relatively small foreign holder of Treasuries, with roughly $9.88 billion in U.S. government debt—down from $18.69 billion in 2020, according to figures cited by Barron’s. By contrast, Japan held $1.202 trillion in Treasuries as of November 2025, while China held $682.6 billion, Treasury data show.
The shift also shortens duration, swapping longer-dated Treasuries for shorter-dated alternatives—suggesting a technical portfolio decision as much as a statement about U.S. credit. And the fact that the pension fund is staying in dollar assets undercuts the notion that it is fleeing the United States. If fiscal sustainability were the dominant fear, a more direct response would be to reduce dollar exposure entirely.
The shift from Treasuries to agency mortgage bonds can boost yield, but it adds a new kind of risk. Agency mortgage-backed securities typically pay more than Treasuries because homeowners can refinance. When rates fall, borrowers repay their mortgages faster, which returns investors’ principal early and forces them to reinvest at lower yields—limiting the bond’s upside compared with Treasuries.
The shift also works best in a world where yields don’t fall much. If rates drop sharply, Treasuries typically outperform, while mortgage-backed securities tend to lag because refinancing speeds up and investors get paid back early. The pension fund may have concluded that U.S. rates are unlikely to fall as much as other investors expect.
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