The New York Pension Fund plans – according to a report by Reuters – to shift funds from shares to bonds. The goal is to reduce market risk and secure liquidity in the $216 billion fund.
At the Reuters Global Investment Outlook 2020 Summit in New York, Anastasia Titarchuk, CIO of the New York State Common Retirement Fund, mentioned that a current asset allocation study will probably come to the conclusion to reduce the proportion of shares. Instead, it is planned to invest in investment-grade fixed income stocks such as U.S. Treasuries. About half of the current assets of the third largest U.S. pension system are currently invested in global equities and about 25% in bonds. The background to the planned measures is Titarchuk’s assessment that high returns on equities are less likely. In the event of a downturn, Titarchuk does not want to sell shares if they are at a low valuation.
Titarchuk stresses, however, that one should not divest oneself of stocks that are considered controversial from an ethical perspective, such as Chinese technology companies whose products can raise private concerns or energy companies that play a role in climate change. Rather, the shares in the companies should be used to enter into a continuous dialogue with those responsible.
“You can always find the next devil that needs to be sold,” says Titarchuk