Degroof Petercam Asset Management (DPAM), a $60 billion Belgian firm, has largely avoided US Treasuries for two decades, citing weak sustainability metrics. The firm’s sustainable government bond fund excludes US debt due to poor scores in equality and governance, a stance now influencing broader portfolio decisions. “The move isn’t ideological—it’s valuation-driven,” says Ophelie Mortier, DPAM’s sustainability chief, though exact divestment figures remain undisclosed due to compliance rules.

The shift mirrors broader European skepticism. Danish pension fund AkademikerPension recently exited a $100 million Treasury portfolio, citing Trump-era policies, while Europe’s largest pension fund, Stichting Pensioenfonds ABP, slashed US holdings by €10 billion. These moves, though small relative to the $30 trillion US bond market, signal growing unease over fiscal policies and governance risks.

DPAM’s criteria rank the US 34th among 38 OECD nations in sustainability, trailing Mexico and Colombia. Factors include high income inequality (Gini coefficient), lack of ratification of international treaties like the Ottawa Convention, and civil unrest risks. Mortier acknowledges US strengths in innovation but stresses “imbalanced” ESG performance.

DPAM’s L-Bonds Government Sustainable fund, managing €750 million, has returned 38% since 2008—lagging the 53% gain of the Bloomberg US Treasury Total Return Index. Mortier frames this as a risk-mitigation strategy, not a profit chase. As European investors diversify, analysts warn the US Treasury’s “safe haven” status faces mounting scrutiny, raising questions about long-term demand.