Pension funds buying into market

Associated Press

NEW YORK — As markets dropped Monday, the largest pension funds were holding tight, just as they have through the last year’s market decline — and some were even buying to show confidence.

New York State’s Common Retirement Fund bought an extra $250 million in U.S. stocks by midday Monday and pledged to invest a total of $1 billion over the next several days.

"We believe that the market is undergirded by the world’s strongest economy and that this represents a real buying opportunity for us," said state Comptroller H. Carl McCall, sole trustee of the $115 billion public pension fund, America’s second largest. "When the market comes back, it will be profitable for all of us."

McCall, among the dignitaries overlooking the stock exchange floor when trading resumed Monday for the first time since last week’s terrorist attacks on the World Trade Center, said the additional investment was motivated less by patriotism than by fiscal prudence.

"If it helps restore confidence in the market, that’s fine," he said, "but the main reason is that it makes sense from a fiscal point of view," since the fund had long wanted to increase the proportion of stocks in its portfolio to 70 percent from 65 percent.

Still, the large trading volume suggested that some institutional players were also selling.

"With 2 billion shares moving, it’s clear that more domestic institutions are participating than say they were," said Len Darling, Chief Investment Officer of Oppenheimer Funds. "An equal number of people need to be buying and selling."

Public pension funds control $2 trillion in investments and more than 30 of them were abiding by a pledge last week to avoid major sell-offs.

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