Rebalancing Pension Funds With Stock Wall Street Journal (08/14/02) Vol. 18, No. 8 p.B9B; Hayashi, Yuka
Many pension funds have been buying stocks during the recent market downturn, trying to strengthen their equity portfolios to meet their long-term investment policy levels through portfolio rebalancing. Some experts think that their equity buying will increase and continue into the autumn. The California State Teachers Retirement System spent $1.2 billion to purchase equity last month to make up for market declines, and the California Public Employees' Retirement System bought stocks valued at $200 million for each 50-point drop in the Standard & Poor's 500-stock index last month. Big plans tend to rebalance just after major market moves, given how much money they work with, but smaller plans tend to wait weeks or months. Investment experts do not agree on whether the funds' rebalancing has affected the stock market.