Global pension funds reduce US equity holdings amid AI valuation concerns

Major global pension funds are reducing their exposure to United States equities due to concerns regarding high market valuations and extreme concentration in artificial intelligence companies. Large institutions, including Australia’s Australian Retirement Trust, Canada’s La Caisse, and the United Kingdom’s People’s Pension, are currently holding US stocks below global benchmark levels.

Market concentration has reached record levels, driven by a small group of technology firms such as Nvidia, Alphabet, and Microsoft. Portfolio managers have noted that US fundamentals appear to be “more than fully priced,” prompting a shift toward diversification to mitigate risk.

According to research from consultancy Marsh, one-third of 430 surveyed entities with combined assets exceeding $5 trillion plan to cut US equity exposure over the next 12 months, a figure that doubles the amount reported last year.