Institutional Quarterly Rebalancing Triggering Continued Weakness in AI Stocks? A Quick Look at $165 Billion Sell-off

BlockBeats News, June 29th, Several analysts recently warned that due to quarterly rebalancing needs, the U.S. stock market will see $165 billion in sell pressure from large institutions by the end of June. According to JPMorgan's analysis, the selling pressure mainly comes from the following 5 major institutional pools:

U.S. Fixed-Income Pension Funds: Managing assets of around $9.6 trillion, expected to contribute around $55 billion in stock sales (due to their relatively loose rebalancing discipline, they usually only partially rebalance).

Japan Government Pension Investment Fund: Managing assets of around $1.9 trillion, expected to sell around $60 billion in global stocks (while buying bonds simultaneously).

Norway Sovereign Wealth Fund: Managing assets of around $2.1 trillion, expected to sell around $40 billion in stocks to realign with its end-of-2025 target allocation.

Swiss National Bank: With the equity weight rising, expected to sell around $25 billion (which would decrease if the target weight is adjusted upward).

Balanced Mutual Funds: With a scale of around $4 trillion, due to stricter monthly rebalancing discipline, there may be a small net purchase of stocks this month (around $15 billion), partially offsetting the aforementioned selling pressure.

Based on past public records, institutional selling pressure mainly concentrates on the last few days of the quarter. Some of the funds will be concentrated in pre-close trading, leading to significant end-of-day selling pressure.

BlockBeats Note: Quarterly rebalancing is mainly due to each institution's specific policy asset allocation targets, such as 60% stocks, 40% bonds. After a significant stock market rise during the quarter, the stock weight exceeds the target, triggering a rebalancing signal. Therefore, the recently surging U.S. AI stocks will be the first targets for these institutions to reduce their holdings.