WS #15916
Corporate pension funds, now at record funding levels, are engaging in a structural shift that removes key market support. By selling equities and 'net stripping' long-duration Treasuries, these large institutional players are reducing their exposure to risk assets and long bonds. This 'pension valve' effect creates a persistent headwind for both stocks and bonds, as the largest plans are no longer buying on dips but are instead selling to maintain their glide paths.
Pension Liquidity Drain
Corporate pension funds, now at record funding levels, are engaging in a structural shift that removes key market support. By selling equities and 'net stripping' long-duration Treasuries, these large institutional players are reducing their exposure to risk assets and long bonds. This 'pension valve' effect creates a persistent headwind for both stocks and bonds, as the largest plans are no longer buying on dips but are instead selling to maintain their glide paths.