The trend of pension funds and endowments shifting money to international stocks and hedge funds will most likely continue, according to The Wall Street Journal.
A study by Greenwich, Conn.-based consulting firm Greenwich Associates also found that institutional investors are increasing the amount of money they are putting into alternative investments. Typically, they have placed money in more traditional investment products, such as domestic stocks and bonds.
“In a very short period of time, this big, stable, slow-moving industry may be completely shifting gears,” said Dev Clifford, a consultant at Greenwich Associates.
Greenwich conducted interviews with 1,000 pension funds, endowments and foundations that collectively oversee $7.2 trillion in assets.
Forty-two percent of public pension funds surveyors stated they are planning to put significantly more money in hedge funds over the next two years. Last year, hedge funds only made up an average of 0.5% of the total investments in those portfolios. For corporate pension plans, the number was 2.2%.
On average last year, institutional investors reduced the percentage of their portfolios allocated to U.S. stocks by two percentage points to 44.7%. The money taken out was allocated to international stocks, hedge funds, private equity and real estate.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.