Apple, Intel, and Two Other Major Stocks Are Purchased By The Largest U.S. Pension Fund: Calpers

The third quarter saw a rise in positions in some of the top stock investments for America’s largest public pension fund by assets, Calpers.

Apple AAPL -1.00% (ticker: AAPL), Intel INTC +1.10% (INTC), Microsoft MSFT -1.81% (MSFT), and General Electric GE +0.54% (GE) stock were all increased purchases by the California Public Employees’ Retirement System. The pension, known as Calpers, revealed the stock trades in a form it submitted to the Securities and Exchange Commission, among other things. The prices listed are current as of the time of writing.

On the adjustments to the investments, Calpers declined to comment. At the end of its fiscal year on June 30, the pension was in charge of $440 billion in assets. According to Calpers’ estimation at the time, it was 72% funded, which meant that for every $1 of obligations, it had 72 cents on hand. Actually, that is above average. According to a Pew Charitable Trusts research that used 2020 statistics, state pensions were typically 69.5% funded.

To complete the third quarter with 35.3 million shares of the iPhone manufacturer, the pension purchased an additional 5.4 million Apple shares. In the first nine months of the year, Apple shares fell 22%, compared to a 25% decline in the S&P 500 index SPX +0.03%. Shares have increased by 8.3% so far in the fourth quarter, while the index has increased by 11%. Apple’s September-quarter earnings, which were released in late October, marginally exceeded expectations. Additionally, the corporation increased stock repurchases to a record level. But earlier this month, Apple issued a warning that Covid-19 limitations in China were disrupting the production of the iPhone, which caused the company’s stock to drop.

The pandemic’s slowing effects have impacted Intel since the spike in demand for better computers brought on by the shift to remote work has subsided, decreasing demand for semiconductors. Late in October, management provided a discouraging financial outlook, which overshadowed the chip giant’s third-quarter report. Late this month, Intel split off its Mobileye autonomous vehicle division (MBLY).

To complete the third quarter with 11.1 million shares, Calpers purchased an extra 1.7 million Intel shares. In the first nine months of 2022, Intel stock fell by 50%, but so far in the fourth quarter, shares are up 18%. Additionally, the pension increased its stake in Microsoft by 2.3 million shares during the quarter, bringing its total holding to 18.9 million. In the first nine months of the year, Microsoft stock fell 31%, and thus far in the fourth quarter, shares are up 6.1%.

After Microsoft reported quarterly growth in its cloud business that dismayed analysts and investors, the company’s shares fell in late October. Financial projections made by management also fell short. A trade association filed an antitrust complaint against Microsoft with the European Commission earlier this month, alleging anticompetitive conduct. Activision Blizzard (ATVI), a gaming publisher, is still subject to antitrust approvals in this transaction.

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GE, on the other hand, plans to begin the process of splitting into three next year. There will be three separate segments: one for power generation, one for aviation, and one for healthcare. Analysts were satisfied with what they observed in the conglomerate’s third-quarter earnings, which were released at the end of October despite one-time items and below projections.

To end the third quarter with 2.5 million GE shares, Calpers purchased an additional 396,145 shares. In the first nine months of the year, GE shares fell 34%. The stock has increased 39% so far in the fourth quarter thanks to an environment that is favorable for so-called cyclical stocks, which flourish when the economy is expanding. The Federal Reserve may be able to hold off on raising interest rates after last week’s inflation reading came in lower than anticipated.