Canada Pension Giant Warns of “De-Dollarization” — Yen and Gold as Alternatives

The U.S. dollar continues to face pressure under President Donald Trump’s policies, prompting one of Canada’s largest institutional investors to seriously consider “de-dollarization.”

 

The Ontario Investment Management Corporation (IMCO), a major government pension and public-fund manager in Canada, released its annual global outlook report on Wednesday (January 28).

 

The report states that in the new environment of trade wars and geopolitical threats, currency risk has become a prominent feature. Investors may want to consider the Swiss franc, Japanese yen (and of course gold) as diversification channels.

 

IMCO Chief Strategist Nick Chamie commented: “Investors may need to think about the rebalancing of the global economy — and what a different role for the United States means for portfolios. This includes reducing exposure to the U.S. to capture growing opportunities elsewhere.”

 

An IMCO spokesperson clarified that the document does not necessarily indicate current actions the fund is taking on currency exposure.

 

IMCO manages approximately C$86 billion (~US$63.5 billion) in assets for Canadian public-sector employees, government entities, and schools. The firm also recommends that, beyond other currencies, investors consider real assets in strategically important areas such as artificial intelligence and energy-related infrastructure.

Dollar Volatility Intensifies

The dollar has recently experienced sharp swings, largely triggered by Trump’s comments on Tuesday (January 27). When asked in Iowa whether he thought the dollar had fallen too much, Trump replied: “No, I think it’s good.” The remark caused the dollar index to post its largest single-day drop since April last year, pushing it to near 4-year lows.

 

On Wednesday, U.S. Treasury Secretary Scott Bessent stepped in to calm markets, reiterating: “The United States has always pursued a strong-dollar policy… If our policies are sound, capital will flow in, we are reducing the trade deficit, and over time that should naturally support a stronger dollar.”

 

The statement eased some speculation about selling dollars and buying yen, providing the dollar with a modest lift.

 

However, several asset managers have already begun seeking alternative safe havens.

 

Recently, European pension funds AkademikerPension and Alecta stated they have significantly reduced U.S. Treasury holdings due to concerns over substantial credit risks stemming from Trump’s policies.

 

Europe’s largest pension fund, Dutch ABP, announced earlier this month that it had sharply cut its exposure to the U.S. Treasury market over the past year. Denmark’s AkademikerPension went further, declaring it would fully liquidate its $100 million U.S. Treasury position by the end of this month.