JPMorgan strategists warned in a Thursday note that portfolio rebalancing tied to the June quarter end could prompt as much as $165 billion of equity selling before the month closes. The bank’s breakdown attributes the bulk of that potential selling to several of the world’s largest institutional asset pools, which are readjusting allocations after a robust run for stocks.
Among the largest contributors, JPMorgan identifies U.S. defined benefit pension plans, which collectively manage about $9.6 trillion in assets. The bank estimates these pension funds could account for roughly $55 billion of equity sales, under an assumption that rebalancing activity proceeds at about one-sixth of the total implied flow. JPMorgan notes this lower assumed intensity reflects the historically looser rebalancing discipline of many defined benefit plans compared with more formulaic vehicles.
Japan’s Government Pension Investment Fund (GPIF), the country’s largest public pension pool with approximately $1.9 trillion in assets, is projected to sell around $60 billion of global equities while buying a comparable amount of bonds, according to the note.
Norway’s sovereign wealth manager, Norges Bank, which oversees a fund of about $2.1 trillion, is estimated to sell roughly $40 billion in equities as it rebalances toward its end-2025 target allocation.
The Swiss National Bank (SNB) is another focal point for JPMorgan. After the SNB’s equity weight rose to 28% in the first quarter from a prior steady level of 25%, JPMorgan’s analysis implies a sale of about $25 billion. The bank adds that if the SNB instead raises its equity allocation to 30%, the required selling would fall to roughly $8 billion.
Not all institutional activity points toward net equity sales. JPMorgan highlights the role of balanced mutual funds that follow stricter monthly rebalancing schedules. The bank estimates this universe encompasses around $4 trillion in assets. With month-to-date returns showing global equities roughly flat and bonds modestly positive, JPMorgan infers these funds would be net buyers of equities to the tune of approximately $15 billion, providing a partial offset to the larger selling flows.
JPMorgan’s note therefore frames the quarter-end picture as a mix of sizeable, concentrated selling from large pension and sovereign pools with some countervailing buying from monthly-rebalancing mutual funds. The bank’s calculations reflect the particular asset sizes and allocation moves of the named institutions rather than any new market developments or decisions beyond those cited.
Additional market references included in the bank’s published materials contain shorthand tickers and bond indicators such as JGB and SNBN in accompanying displays.