Now that we are in the last trading week of the quarter, the question of rebalancing pension flows has again arisen amid trading desks, and as JPM's Nick Panigirtzoglou writes, with the recent release of the US flow of funds for 1Q24, we can also look at the proportion of the estimated rebalancing flow that has taken place.
Here is the analysis the author of JPM's Flows and Liquidity newsletter does to calculate how much quarter-end selling is on deck:
When we look at the universe of US defined benefit pension funds, private and public funds together have just over $9tr of assets. If we assume they were fully rebalanced at the end of December and taking into account the QTD performance of US equities and bonds, we estimate that the pending equity rebalancing flow by US defined benefit pension fund plans into quarter-end could see net selling of equities of just under $80bn.
