As the U.S. stock market struggles, it is facing another head wind: Some of the nation's most powerful investors are unloading shares in a big way.
Several of the largest public pension funds have been selling billions of dollars held in U.S. stocks, and others are expected to join in. In most cases these actions are unrelated to the recent market jitters, though worries about the economy, the weakening dollar and the credit crisis could be accelerating these moves. [...]
The more sophisticated money managers at endowments devote only about 15% to 25% of their assets to domestic stocks, compared with 35% to 50% at large public pension funds, Ms. Steer said. But over the next few years, she expects the figure for pension funds to drift lower, with the more aggressive ones placing only 25% of their investments in U.S. stocks. Even the conservative funds, she said, eventually will have less than half of total assets in U.S. stocks.
The Teacher Retirement System of Texas holds a $56.7 billion position in U.S. stocks. It plans to halve that position over the next two to four years so U.S. stocks will fall to just 25% of the portfolio. [...]
In Florida, the Retirement System Pension Plan examined the potential returns, relative to perceived risk, for U.S. stocks versus other investments. The $136 billion pension fund decided to cut its target for domestic stocks to 38%, from 48% in 2003, during the previous investment revision. At the same time, the fund raised its targets for foreign stocks, bonds and private equity.
Even Texas and Florida, which both had the benefit of genius governors named Bush, are buying foreign.
Nice to know the grown-ups are in charge while the USA flushes itself down the subprime, plunging dollar, penny-stock economic toilet.