Pension funds, foundations and endowments are maintaining their equity commitments and have begun to cautiously rebuild their equity holdings since the market meltdown, according to the results of a J.P. Morgan Asset Management survey of institutional investors.
While much has been written about massive de-risking and we do see a more definitive shift away from equities on the part of some investors our survey finds that for the vast majority, equity remains the largest target allocation, said a report about the survey.
While some investors are pausing on rebalancing, on average, their targeted allocations for the next 12 months are only slightly below their original year-end 2008 targets, the report said.
While 4% of investors are increasing equity allocation targets, 52% are leaving equity targets unchanged for the next 12 months relative to their original 2008 levels, the survey found.
Among the remaining 44% of investors who are decreasing equity allocation targets, 23% are decreasing target levels by less than 10 percentage points, the report said. But the other 21% of investors decreasing equity targets do appear to be moving more deliberately away from equities; they are decreasing equity allocation targets by 10% or more, the report said.
The 324 respondents represented corporate, public and Taft-Hartley pension funds as well as endowments and foundations. They were surveyed from April 16 to May 5.