Real-Money Funds Dump $100 Billion of Stocks on Rebalancing
- Stock sales break 2022 rebalancing trend that stoked rallies
- Funds that hew to balanced strategies will need to buy bonds
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The world’s biggest money managers are set to unload up to $100 billion of stocks in the final few weeks of the year, adding to a selloff that’s snowballed since Jerome Powell’s unequivocal message that policymakers will press on with aggressive tightening at the risk of job cuts and a recession.
Notwithstanding their losses this week, equities gained over the quarter, driving up their value relative to other asset classes and forcing managers with strict allocation mandates to sell them to meet targets. Bonds are the likely beneficiaries of sales by sovereign wealth, pension and balanced mutual funds looking to replenish their fixed-income holdings, according to JPMorgan Chase & Co. and StoneX Financial Inc.