UBS sees U.S. pensions adding stocks, selling bonds in third quarter

[September 26, 2015]  NEW YORK (Reuters) - U.S. pensions may add $21 billion to $26 billion in stocks and sell $19 billion to $24 billion in bonds in the third quarter as they seek to rebalance their portfolios as the stock market has fared poorly in the quarter, according to UBS analysts.

Within equities, these retirement plans may add $7 billion to $9 billion in emerging markets, and $6 billion to $7 billion in U.S. large cap stocks, UBS strategists Boris Rjavinski and Matthias Rusinski wrote in a research report published on Friday.

A typical pension stock portfolio has lost 8 percent in the third quarter, while an average pension bond portfolio has notched a 1 percent gain, they said.

Pension funds' reduction in bond holdings will likely begin with the sales of Treasury futures and trimming of investment-grade securities that have been profitable, the UBS analysts said.

(Reporting by Richard Leong)

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