here we go....here comes the stimulus and Asset Managers need to buy to get back to a 60/40 blend...one of the “Darlings of the Dow”—DIS will be bought, both hands!!!
We are talking about month and quarter-end rebalancing, and according to JPMorgan estimates, balanced or 60:40 mutual funds, a $1.5tr universe in the US and $4.5tr universe globally, need to buy around $300 billion of equities to fully rebalance to 60% equity allocation.
At the same time the $7.5 trillion universe of US defined benefit plans, would need to buy $400 billion to fully rebalance and revert to pre-virus equity allocations.
Finally, there are the "balanced" sovereign pension funds such as Norges bank and GPIF, which before the correction had assets of around $1.1tr and $1.5tr, respectively, and which according to JPM would need to buy around $150 billion equities to fully revert to their target equity allocations of 70% and 50%, respectively.