Britain’s $2.9 Trillion Pension Industry Yanks Money From Equities
If the basic tenet of investing is knowing when to buy and sell, the stock market boom has taken that decision out of the hands of some money managers.
The $2.9 trillion British pension fund industry is yanking money at an accelerated pace as company valuations forge new records globally. The reason is that the gains are triggering sell orders to quickly lock in investment returns, a safety mechanism introduced after the financial crisis to reduce exposure to potential market bubbles and subsequent collapses.
“Triggers are going off constantly,” said Justin Arter, head of BlackRock Inc.’s U.K. institutional client business for the U.K., Middle East and Africa in London. He said redemptions are indiscriminate. “There is hardly a week that goes by when a pension fund isn’t redeeming part of their equity portfolio.”
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