NEW YORK (Reuters) – U.S. pension funds that delayed rebalancing their portfolios are likely to pump about $400 billion into stocks over the next two quarters, analysts at JP Morgan said, providing a potential boost to equity markets battered by the coronavirus pandemic.
FILE PHOTO: A man wears a protective mask as he walks on Wall Street during the coronavirus outbreak in New York City, New York, U.S., March 13, 2020. REUTERS/Lucas Jackson
Weeks of asset price volatility may have pushed some fund managers to postpone rebalancing portfolios where equity allocations have been knocked out of whack by a sharp decline in stocks, the bank said in a note to investors. The S&P 500 fell 20% since the start of the year, marking its worst quarter since 2008.
“We still expect that US pension funds will eventually rebalance within 1-2 quarters,” wrote strategist Nikolaos Panigirtzoglou.
The bank said its estimate of $400 billion in equity buying by the funds over the next two quarters…