South Dakota Investment Council, which oversees the state’s pension, sold Apple stock in the first quarter.
South Dakota Investment Council, which oversees the stalwart state pension, made some major changes in its publicly traded portfolio in the first quarter, a period marked with coronavirus-induced volatility.
The Pew Charitable Trusts noted in a study that the South Dakota Retirement System was one of the top three best-funded state pensions, using 2017 data. The pension comprised 82% of the SDIC’s $15.2 billion assets as of June 30, 2019. By its own reckoning, the SDIC puts the net annual returns of the South Dakota pension in the top 1% among all states for the 46 years under its management.
The SDIC sold Apple (ticker: AAPL), General Electric ( GE), and Gilead Sciences stock (GILD) in the first quarter. It also initiated a large position in SPDR S&P 500 ETF Trust (SPY), the exchange-traded fund that tracks the S&P 500 index. The SDIC disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
The SDIC declined to comment on its stock trades.
Apple stock slid 13.4% in the first quarter, but so far in the second it has wiped out that earlier loss with a 21.0% gain through Friday’s close. Sales of the iPhone in China had been a concern, but there was a sharp spike in April. Strength in Apple’s services business had offset worries about the delay of 5G phones.
The SDIC sold 32,426 Apple shares in the first quarter to trim its investment to 510,600 shares.
The pension manager also sold 479,245 GE shares in the quarter to slash its stake to 174,906 shares.
GE stock tumbled 28.9% in the first quarter, and is down another 30.9% so far in the second. The embattled shares have slid to their lowest price in decades in last week. Investors don’t like the company’s exposure to commercial aerospace. Still, many analysts are bullish on GE stock.
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Gilead Sciences stock rose 15.1% in the first quarter on hopes the biotech could develop a cure for Covid-19. Shares have gained another 2.0% so far in the second quarter. On May 1, the Food and Drug Administration issued an emergency use authorization to allow Gilead’s drug remdesivir to be prescribed to Covid-19 patients.
The SDIC sold 151,600 Gilead shares in the first quarter, cutting its investment to 394,637 shares.
The pension manager also bought 1 million shares of the SPDR S&P 500 ETF in the first quarter. It didn’t own any at the end of 2019. The shares slipped 19.5% in the first quarter, but so far in the second they are up 11.1%.
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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May 17, 2020 at 07:08PM
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A Smart Pension Manager Sold Apple, GE and Gilead Stock in First Quarter - Barron's
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