Dutch Pension Fund ABP Significantly Reduces US Treasury Holdings Amid Shifting Investment Strategy

Europe's Largest Pension Fund Scales Back US Treasury Investments

ABP, the Netherlands-based pension fund and Europe's largest with over €500 billion in assets under management, has significantly reduced its holdings of U.S. Treasuries. Between March 2025 and September 2025, the fund's investment in U.S. government bonds decreased by approximately €10 billion. This reduction saw ABP's U.S. Treasury exposure fall from over €29 billion to roughly €19 billion, representing a cut of over a third of its holdings.

Strategic Reassessment and Diversification Efforts

The substantial reduction in U.S. Treasury holdings by ABP signals a strategic pivot in its investment approach. While ABP has not provided a single definitive reason for the move, analysts and reports suggest a combination of factors. These include evolving risk management and yield-seeking strategies in a changing global macroeconomic environment, as well as a desire for greater diversification across geographies and asset classes.

Concerns over the financial stability of the U.S. and its assets, alongside geopolitical considerations, have also been cited as influencing factors. Experts indicate that the decline was primarily driven by ABP's decision to actively sell or refrain from purchasing new Treasuries, rather than being solely attributable to a decrease in bond prices. The fund's spokesperson acknowledged that 'multiple factors influence the fund's investments in government bonds, including a country's fundamental situation and prospects.'

Shift Towards European Bonds and Broader Trends

The funds divested from U.S. Treasuries have largely been reallocated to other fixed-income assets, particularly European sovereign bonds. ABP increased its holdings in Dutch, German, and Belgian government bonds during the same period. For instance, the fund added an additional €3 billion in Dutch government bonds and over €6 billion in German state bonds. Other reallocations included inflation-linked bonds and private infrastructure debt, aligning with a broader strategy to enhance portfolio yield without significantly increasing credit risk.

This move by ABP is not isolated, as other institutional investors across Northern Europe have also shown increasing caution regarding U.S. assets. Danish pension funds, such as AkademikerPension, and Swedish pension fund Alecta have similarly reduced or exited their U.S. Treasury holdings, citing issues like fiscal discipline and geopolitical tensions. This trend underscores a potential shift in sentiment among major European investors concerning long-dated U.S. debt amidst global economic uncertainties.