The main US federal government pension will exclude investments in Hong Kong, in addition to mainland China, for its $68 billion international fund, amid rising tensions between the world’s two largest economies.

The $771 billion Federal Retirement Thrift Investment Board said it will switch the benchmark index for its international fund, effectively ridding exposure to Hong Kong, according to a statement on Nov. 14. It already avoids exposure to the mainland.

The change comes amid heightened geopolitical tensions, as Washington is trying to prevent China from acquiring high-end computer chips and has imposed curbs on US investments in the world’s second-largest economy.

The so-called I fund, which manages pensions for nearly 7 million federal employees, is shifting to the MSCI All Country World ex-USA ex-China ex-Hong Kong Investable Market Index next year. The fund was previously benchmarked against the MSCI Europe, Australasia and Far East Index.

“If the current investment restrictions on China are the beginning of further restrictions spanning China and Hong Kong investments, this level of uncertainty can outweigh the benefits of expanding the I Fund to include China and retaining exposure to Hong Kong,” it quoted consultancy Aon Plc in the statement.

Events such as investment restrictions on sensitive Chinese industries, delisting of Chinese companies from US exchanges and sanctions on Russian securities has led to transaction costs and swings in returns, it added.

The fund has never had investments in mainland China, according to an August fact sheet posted on the board’s website. Hong Kong has accounted for less than 4% of the index.

The existing benchmark has 798 large- and mid-cap stocks in 21 developed markets. The new benchmark allows access to 5,621 stocks in 21 developed and 23 emerging markets, accounting for 90% of non-US market value, according to the statement.