One of Canada’s largest pension managers, Public Sector Pension Investment Board, sold Berkshire Hathaway and Bank of America stock in the second quarter. It bought Citigroup stock, and initiated a position in Virtu Financial.
Eric Frances/Getty ImagesOne of Canada’s largest pension managers made big changes in its U.S.-traded investments in the second quarter.
Public Sector Pension Investment Board sold Bank of America (ticker: BAC) and Berkshire Hathaway (BRKb) stock, bought Citigroup (C) stock, and initiated a position in Virtu Financial (VIRT). PSP, as the pension manager is known, disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
PSP, which managed $129 billion as of March 31, declined to comment on the stock trades.
The pension manager halved its investment in Bank of America by selling 1.07 million shares to end the second quarter with 1.11 million shares of the banking giant.
Bank of America stock hasn’t recovered from a 40% drop in the first quarter, when the coronavirus pandemic was roiling markets. Shares remain down 25.3% year to date through Friday’s close, including a 10.7% rise in the third quarter. By contrast the S&P 500 index is up 8.6% year to date, with a 13.2% rise since the end of the second quarter.
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We noted that Bank of America has at least one fan on Wall Street for its effort to drive “responsible growth.” Others see the bank as positioned well during the downturn for the sector.
Warren Buffett’s Berkshire Hathaway has been increasing its investment in Bank of America stock, but PSP reduced its position in class B Berkshire Hathaway stock in the second quarter by 114,100 shares to 187,491 shares.
Berkshire Hathaway’s class B shares are down 3.5% this year, and that includes a 22.4% third-quarter rally.
Buffett’s conglomerate reported a large first-quarter loss after the value of its investments tumbled. One prominent investor said in May that he exited Berkshire Hathaway. Recently, the disclosure that Berkshire Hathaway bought some Barrick Gold (GOLD) stock caused a stir, but we think Buffett himself didn’t execute the transaction.
SPS bought 185,100 Citigroup shares in the second quarter to end June with 1.07 million shares of the banking giant.
Citigroup stock has been battered, and its year-to-date loss stands at 34.6%, including a 2.3% rise in the third quarter.
Citigroup’s second-quarter report in July topped expectations, but a larger-than-expected loan-loss provision in the quarter may have unnerved investors, as the stock slid after the report. Earlier this month, Citigroup was trying to claw back payments to Revlon (REV) lenders that the bank said it sent in error.
PSP initiated a position of 11.7 million shares of Virtu Financial in the second quarter. It hadn’t owned any shares of the financial-services firm at the end of March.
Virtu Financial stock has had a boffo 2020, with a year-to-date gain of 55.7%, including a 5.5% third-quarter rise.
Virtu Financial has benefited from stock volatility. The company named a new chief financial officer earlier this month.
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 edward.lin@barrons.com and follow @BarronsEdLin.
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August 29, 2020 at 06:00PM
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A Big Pension Sold Berkshire Hathaway and Bank of America. Here’s What It Bought. - Barron's
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