Danish investors shun the US but complete divestment ‘unlikely’

A handful of Danish pension investors are pulling capital out of the US market citing concerns about the nation’s ballooning debt and President Trump’s aggressive stance towards Greenland, but acknowledged that completely divesting from the US market is unrealistic.  

The $24 billion Danish pension fund for academics, AkademikerPension, made headlines this week after announcing that it will divest its entire $100 million portfolio in US government bonds.  

Chief investment officer Anders Schelde told Top1000funds.com the fund will invest in US dollars and short-dated agency debt as alternatives to US Treasuries, which were only used for liquidity and risk management purposes. 

Schelde said the move is not a political message but “rooted in the poor US government finances”, the ongoing tension in Greenland certainly made the decision easier. 

The biggest sovereign exposure in the fund’s $9.1 billion government and mortgage bonds portfolio is $703 million in Danish government debt.  

Meanwhile, PFA Pension, Denmark’s largest fund with $129 billion in assets, said it sold down US Treasuries in 2025 and increased currency hedging due to the US’ “unilateral” trade policies and repeated challenges from President Trump to the nation’s central bank, according to a website statement from chief strategist Tine Choi Danielsen. 

The $44 billion Sampension is similarly mulling over US exposures in its listed equities (25.7 per cent of the total portfolio) and alternatives portfolio (32 per cent). The fund doesn’t target US Treasuries in its strategic asset allocation. 

“We are currently maintaining a wait-and-see approach. However, the prevailing uncertainty is not supportive of investments in the United States,” deputy chief investment officer Jesper Nørgaard told Top1000funds.com.  

However, it might indeed be the case that a complete divestment from the US will hurt Danish funds’ performance and ultimately their pensioners more than the US government’s balance sheet.   

AkademikerPension’s Schelde said due to the US market’s strong historical performance, the fund is “unlikely” to retreat completely from its exposure to the US. Its $7.6 billion listed equities and $1.8 billion unlisted equities portfolios are both dominated by the US with an allocation of around 60 per cent. 

Danish investors owned $9.88 billion in US Treasuries as of November 2025, according to data from the Federal Reserve. which is a fraction of the $9.3 trillion US Treasury debt owned by foreign countries.  

But 26 per cent of Denmark’s $782 billion pension assets are invested in the US as of March 2025, according to figures from the Danish industry association for insurer and pension association, Forsikring & Pension. This has grown substantially from 16 per cent in 2018 and officially overtook the holdings of European assets in 2022.  

Danish pension investments in US stocks have yielded a return of $89 billion since 2018, far outpacing the $15 billion yielded from European stocks and the $38 billion from Danish stocks in the same period and highlights the risk and return impacts associated with any decisions to divest 

US Treasury Secretary Scott Bessent’s biting words at the World Economic Forum this week showed it would need much more investor action, than just the changes from the Danish pension funds, to sway the US’ geopolitical ambition.  

“Denmark’s investment in US Treasury bonds, like Denmark itself, is irrelevant,” he told reporters at a press conference at Davos on Wednesday.  

“It’s less than $100 million, they’ve been selling treasuries for years. I’m not concerned at all,” he said, referring to AkademikerPension’s announcement.  

He also dismissed the idea that European investors can weaponise the $8 trillion of US assets they hold and initiate a mass sell-off as a way to keep the US in line on Greenland. 

Nevertheless, Trump later backed down from tariff threats towards Europe in a speech delivered to the same forum, marking a de-escalation of the tension, but said he will “seek immediate negotiations” around the acquisition of Greenland from Denmark.  

How Europe can assert its independence from an increasingly aggressive US will be an ongoing theme in the coming years. 

AkademikerPension’s Schelde expects more investors to allocate financial support to Europe’s strategic independence from the US. 

“It is clear that these funds will not flow to the US or other non-European markets. Our own recent investment in a European defence fund can be seen as a good example of this,” he said. 

For more on how European funds are investing in defence in the region, see [Europe rearms, defence returns surge, asset owners rethink exposure].