Sweden’s national pension cut back on U.S.-traded tech stocks that outperformed in the first quarter.
Forsta AP-fonden, which manages part of the pension, cut investments in
Apple
(ticker: AAPL),
Tesla
(TSLA),
Intel
(INTC), and
Nvidia
(NVDA). The fund disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
Forsta AP-fonden didn’t respond to a request for comment. It manages about $41 billion of the pension’s overall assets of more than $1 trillion with a mandate to invest “so as to achieve high returns over the long term at low risk.”
The pension is well-funded. Its 2020 annual report—the latest—noted it had a surplus of $78 billion for a funded ratio of 1.0824%, or a little more than $1.08 percent for each dollar of liability. A study by the Pew Charitable Trusts, using 2020 data, found that the average U.S. state pension was 69.5% funded, about 31 cents short for every dollar of liability.
Forsta AP-fonden sold 519,900 Apple shares in the first quarter to lower its investment to four million shares. The iPhone maker’s stock soared 27% in the first quarter, compared with a 7% rise in the
S&P 500 index.
So far in the second quarter, shares are up 2.9%, topping the 1.5% gain in the index.
Apple reported disappointing December quarter earnings in February, but investing legend
Warren Buffett
has expressed his love for the stock and the loyalty of iPhone users. General Motors (GM) announced the end of support for CarPlay, an app that lets users access iPhone functionality through the car display. We think that Apple could dip a toe into the car industry itself by acquiring
Visteon
(VC), an auto supplier that makes instrument clusters, telematics, and displays.
Tesla is a name that auto investors know well, and nearly everyone has an opinion on what CEO Elon Musk should do. We think it’s time for the electric-vehicle maker to buy advertisements, a strategy it has never tried, and ads could be more effective than cutting EV prices. Tesla’s first-quarter earnings, reported in April, disappointed.
Tesla stock rocketed 68% in the first quarter; so far in the second quarter, shares are down 21%. The pension sold 81,800 Tesla shares to end the first quarter with 642,600 shares.
Forsta AP-fonden made more severe cuts percentage-wise to its investments in chip stocks Intel and Nvidia, respectively selling 443,800 shares and 137,100 shares to end March with 838,346 shares and 588,700 shares.
Intel stock rose 24% in the first quarter, while Nvidia stock leapt 90%. So far in the second quarter, they are down 5% and flat, respectively.
A disappointing quarterly report from Intel in January also hurt Nvidia stock, before both shares recovered to end the period with gains. Intel’s latest report, on Thursday, showed its worst quarterly loss ever, but an upbeat outlook for sales sent the stock higher. Nvidia’s latest strong quarter, reported in February, included a boost to earrings guidance, lifting shares. Intel and Nvidia are both capitalizing on interest in artificial intelligence, but they will be competing with a rush of start-ups.
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at [email protected] and follow @BarronsEdLin.
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