More of the 200 largest U.S. pension funds are using financial futures and options, but fewer are using managed futures and short selling, statistics collected for Pensions & Investments' 1996 pension fund directory show.
The number of pension executives reporting the use of stock index futures rose to 80 from 68 in the previous year's survey. Sponsors reporting the use of stock options rose to 60, from 50. Sixty-two of the top 200 reported the use of fixed-income futures contracts, vs. 53 in the previous year. Fixed-income options were used by 39 of the top 200 pension funds, up from 31.
The number of funds using managed futures fell to 13, from 17. The number of pension funds reporting the use of short selling dipped to 17 from 18.
Swaps were used by 22 of the largest 200 U.S. pension funds; no comparison was available because the survey didn't ask this question last year.
International investment by U.S. tax-exempt institutions grew 24% during 1995, according to estimates by InterSec Research Corp.
The consultant estimates non-U.S. investments increased $70 billion last year.
New cash flows provided $34 billion of the growth, down from $40 billion in 1994. Market growth contributed $36 billion, much improved from 1994's negative returns.
InterSec officials estimate total U.S. tax-exempt investment overseas at $366 billion as of Dec. 31, up more than 140% from $151 billion at the end of 1992.
The $18.8 billion Los Angeles County Employees Retirement Association approved an RFI that will put more than $5 billion in fixed-income holdings up for grabs. The RFI will be sent to the fund's current bond managers as well as other firms.
The fund is moving toward more of a core sector rotational investment approach for fixed income, and current money managers without that capability will probably be dropped.
The exact details of the RFI are expected to be approved later this month.
Frank Russell will assist with the search.
