The "trillion-yuan pension giant" in a corner accelerates the "unloading" of star stocks

In the global pension landscape, there is a "regional" institution that ranks among the top ten in scale.

This institution does not stand out in the name of a country, but rather as a regional entity, namely the California Public Employees' Retirement System (abbreviated as CalPERS, hereinafter referred to as "California Pension").

California Pension is also a "gold digger" for Chinese listed companies, involved in major capital markets worldwide, fully demonstrating a wealth level that is "rivaling nations."

This pension fund has also "challenged" Tesla, publicly opposing Musk's $56 billion compensation plan as a shareholder in 2024, which even prompted a "retort" from Musk himself.

California Pension has also directly confronted energy giant ExxonMobil over environmental protection controversies, making the latter's board feel "threatened."

This massive "pension giant" recently revealed a significant reduction in its holdings of Apple stock, and this "offloading" began over a year ago, showing that it has long been "seeing through" many star stocks.

Reduced Holdings of 5.1 Million Shares of Apple

According to the U.S. Securities and Exchange Commission (SEC), California Pension reduced its holdings of Apple Inc. stock by 5.1 million shares in the first quarter of 2025, bringing its total holdings down to 34.7 million shares.

Reviewing California Pension's U.S. stock holdings, the reduction in Apple stock accounts for 1.29% of the total portfolio, ranking first. The next highest reductions in the total portfolio include Nvidia, Tesla, Microsoft, and Amazon.

These companies are all representative of star tech stocks in the U.S. market.

Tech Stocks Become the Focus of Reductions

Combining the information submitted by California Pension to the U.S. Securities and Exchange Commission (SEC), Zhitong Finance found that the institution took "preemptive action" in the first quarter of 2025, significantly reducing its holdings before the global stock market crash in early April.

California Pension reduced its holdings of 13 U.S. stocks by more than 1 million shares, of which 8 stocks belong to the information technology and communications sectors.

Among them, the reduction in Apple stock ranks first, followed by AT&T, Micron Technology, Walmart, Gilead Sciences, Cisco, and Oracle.

(As shown in the above image) These companies have all been held by California Pension since early 2001. Therefore, a reduction of "millions of shares" naturally attracts global market attention.

More importantly, the position of Apple stock is quite significant within California Pension. The following image is a screenshot from the annual report of this pension fund as of the end of June 2024.

The above chart shows that the market value of the Apple stocks held is $8.82 billion, a scale equivalent to many Wall Street hedge funds, and it is the second-largest holding stock of the California pension fund, only behind Microsoft (with a corresponding market value of $9.5 billion).

Reducing Holdings "Too Early"

Reviewing the reports from the past few quarters, the California pension fund did not reduce its holdings in U.S. stock star companies on a whim, reflecting a kind of "foresight" operation.

For example, by the end of the fourth quarter of 2024, the company with the largest reduction in holdings was NVIDIA, with the California pension fund reducing its holdings by as much as 5.63 million shares in a single quarter.

At the same time, the aforementioned AT&T saw a reduction of 4.24 million shares, and the California pension fund also reduced its holdings by over 1 million shares in both Walmart and ON Semiconductor, while completely liquidating two U.S. energy companies.

It can be seen that the California pension fund is not only reducing its holdings in overvalued tech stocks but also has a pessimistic view on consumer companies. This trend can be traced back to the end of the third quarter of 2024, when the reduction in Starbucks shares also exceeded 1 million shares.

In the same reporting period, Tesla faced a reduction of up to 4.47 million shares, while Cisco was reduced by 2.41 million shares.

Furthermore, by the end of the second quarter of 2024, the reduction was even more "stunning," with a single-quarter reduction in NVIDIA shares reaching 13.96 million shares.

In contrast, many institutional investors have been continuously increasing their positions in NVIDIA over the past year, but the California pension fund, which established a position in NVIDIA back in 2001, did not add further but instead "went against the trend."

Why Reduce Holdings?

In mid-March 2025, the California pension fund held a discussion meeting of the investment committee, from which some clues may be found.

The meeting minutes included the following viewpoints:

"The impact of valuation will transmit to capital market pricing. Valuation factors account for about three-quarters of the risk in U.S. stocks... The fear or greed in investor sentiment can significantly affect capital market pricing. Therefore, valuation is crucial... The escalation of geopolitical risks will ultimately exacerbate market volatility, as evidenced by the severe negative reactions in the capital markets during the Russia-Ukraine conflict. We expect the market to experience similar levels of volatility. For institutional investors, how to manage risks effectively in such an environment is key."

In other words, the investment decision-makers of the California pension fund have increased their "alertness" to valuation risks in U.S. stocks by the end of the first quarter of this year.

"Wealthy Enough to Rival Nations"

At this point, investors are certainly concerned about how much investment strength the California pension fund has.

According to the official website of this pension fund, there is a financial report as of June 30, 2024, which disclosed the following about its investment activities over the past fiscal year:

"This year achieved a time-weighted net return of 9.3%, exceeding the discount rate target of 6.8%. As of June 30, 2024, the fair value of the investment portfolio reached $551.4 billion, and the overall funding ratio of the fund increased to 75%."

In other words, the market value of the assets this institution invested in reached $551.4 billion, equivalent to nearly 4 trillion yuan.

The aforementioned investment market value exceeds the total GDP of many countries worldwide As of the above fiscal year, the asset allocation of California pension funds is quite "high-profile" in terms of equity assets, with the proportion of holdings in the secondary market stock category reaching 42%. In addition, it has also invested in foreign exchange, bonds, real estate investment trusts (REITs), private equity assets, and more.

It is worth noting that publicly listed companies outside the U.S. market are the focus of its equity investments, with large Chinese banks, internet giants, and others falling within its allocation scope.

This pension fund has the following records regarding long-term investment performance: "(As of the above fiscal year) the annualized return over the past five years is 6.6%, ten years is 6.2%, twenty years is 6.7%, and the thirty-year return rate slightly increased to 7.7%."