Ms Toothfairy is back (#1564081) saying nice things. (Occasionally she does that, #1524119, #1530719)

We know bonds are dying (#1472159, #1434288), and that the 60/40 portfolio is outdated trash... just buy AI stocks and treasury companies, like our benefactor Mr. Blok?!

Today we learn that even the oil fund is ditching bonds

Readers of Unhedged love a bit of asset allocation discourse. A week after Hakyung wrote about the challenges facing the classic 60/40 portfolio model, and followed up with a selection of the correspondence this provoked, she is still getting loads of emails about it. Seriously, loads. But you don’t often get live conversations on this topic at big investment houses aired in public. Step forward Norway’s super-huge oil fund, all two-and-a-bit trillion dollars of it, the biggest single investor in the world, practically visible from space. Last week it proposed chopping the weight of government debt in its bonds portfolio from 70 to 50 per cent

Of course, the mainstream media reported on this as if it were an anti-Trump move: "U.S. gov bonds are bad."

...except that the wider conclusion was more appro: all bonds are trash. Madam Toothfairy knows it:

The fund is not proposing pulling back from fixed income altogether. It looks like it’ll stick at today’s split of 70 per cent stocks, a bit over 25 per cent fixed income, and the rest still in renewables and real estate. But within that fixed income slice, it’s talking about going from 70/30 government debt/corporate debt to more like 50/50. And yes, Treasuries are likely to take the strain here, but still, this is not a rejection of US assets as such, and though it is tempting to read a political snub into all this, that really isn’t what’s going on.

LOL, amazing:

This is an articulation of something that, deep down, we all know to be true. Government debt, including US government debt, is just not the pristine risk-free asset we’ve all pretended it is for the past few decades
By contrast, as the fund says, corporate and, for example, mortgage-backed bonds, make it worth your while and often perform at least part of the same safety-net purpose.

TLDR, they're not "selling America"; they're just cycling out of government bonds altogether.

archive: https://archive.md/http://ft.com/content/fe0cbcfc-b351-4dac-889f-7b8f11f79102