JPMorgan Sees $165 Billion Quarter-End Equity Selling as Institutions Rebalance 60/40 Portfolios
Updated
Updated · 24/7 Wall St. · Jun 22
JPMorgan Sees $165 Billion Quarter-End Equity Selling as Institutions Rebalance 60/40 Portfolios
3 articles · Updated · 24/7 Wall St. · Jun 22
Summary
$165 billion in equity selling could hit markets in the final days before June 30 as large institutions trim stock holdings that have outgrown allocation targets.
JPMorgan said the pressure is mechanical rather than fundamental: stocks have outperformed bonds, pushing portfolios away from 60/40-style mixes and forcing sales of equities to buy bonds.
Japan's GPIF accounts for about $60 billion of the projected selling, followed by Norway's sovereign wealth fund at $40 billion and Switzerland's central bank at $25 billion; U.S. pension funds add roughly $9.6 billion.
That flow is still small against a roughly $65 trillion-$70 trillion U.S. stock market and $500 billion-$800 billion in average daily trading, though crowded tech trades and thin liquidity could magnify short-term swings.
Balanced mutual funds are expected to buy about $15 billion of equities, and JPMorgan says earnings, economic data and rates should matter more than a temporary four-year-high rebalancing wave.