Ontario Teachers’ Pension Plan made some major changes in its U.S.-traded stock investments in the first quarter, a period marked with volatility from the coronavirus pandemic.
The pension, one of the largest in the world by assets, initiated a position in
stock (ticker: MSFT) and doubled an investment in
Alibaba Group Holding
(BABA) American depositary receipts. Ontario Teachers’ also sold
(AMZN) and bought
stock (MMM). The pension disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
The provincial pension, which managed $150 billion in net assets at the end of 2019, declined to comment on its stock trades. Ontario Teachers’ is formidable by its size and its execution, having just ended its seventh year of being fully funded. Its funded ratio stood at 103% at the start of 2020, which meant net assets more than covered liabilities. That is an enviable position. A study by The Pew Charitable Trusts using 2017 data showed that the average American state pension had a funded ratio of only 69.1%.
Ontario Teachers’ bought 507,493 Microsoft shares in the first quarter. It hadn’t owned any shares of the software giant at the end of 2019.
Microsoft stock has surged 16.4% in the second quarter through Friday’s close. In comparison, the
S&P 500 index,
a broad measure of the market, has gained 14.3% in the second quarter.
The company reported strong fiscal-third-quarter earnings at the end of April, and we noted that observers saw strength in Microsoft’s cloud business. Microsoft stock was a popular pick in our latest Big Money Poll.
The pension bought 219,600 Alibaba ADRs in the quarter to lift its investment to 438,300 ADRs of the Chinese online giant.
Ontario Teachers’ sold 53,905 Amazon shares, slashing its investment in the retail and cloud giant to 1,576 shares.
Amazon stock has surged 25.0% for the second quarter to date, benefiting from a rush into so-called stay-at-home stocks. Amazon is also looking beyond merely delivering packages in the coronavirus pandemic. In a recent earnings call, the company said it is developing its own Covid-19 testing capabilities.
3M stock has gained 7.3% so far in the second quarter. The manufacturing giant reported a strong first quarter that was boosted by its health-care and personal-safety-equipment operations.
The pension bought 90,156 3M shares in the first quarter, lifting its investment to 502,345 shares.
Corrections & Amplifications
An earlier version of this article misstated in one line that Ontario Teachers’ Pension Plan sold 3M stock. It purchased the shares.
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. Because of their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.