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Portfolio Re-balancing Could See $300B Stock to Bond Rotation

beebee
edited November 2020 in The Bullpen
“We see some vulnerability in equity markets in the near term from balanced mutual funds, a $7 trillion universe, having to sell around $160 billion of equities globally to revert to their target 60:40 allocation either by the end of November or by the end of December at the latest,” the strategists wrote

If the stock market rallies into December, there could be an additional $150 billion of equity selling into the end of the month including from pension funds that tend to rebalance on a quarterly basis, they added.
jpmorgan-sees-possible-300-billion-rebalancing-flow-from-stocks

Seems unwanted bonds will need to be purchased to offset the out performance of equities in balanced funds and bond / stock allocation funds.
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