Institutional investors have been reluctant to rebalance to policy equity allocation levels because of an "enormous angst the market decline has caused,” said Barker French, chief investment strategist at Brinker Capital. It manages $450 million for institutional investors. Pension fund sponsors might have reached the lower limit of their policy equity target ranges, which ordinarily would trigger rebalancing, he said. "It is taking a lot of talking” to get those accounts to commit to rebalancing, and most clients are waiting until they think the market has bottomed, which they don’t see yet, said Mr. French during a teleconference.
Mr. French was critical of market timing. Investors risk big losses or opportunity costs from failing to time exits from and entries into the market correctly, he said.
