U.S. pension funds, endowments and foundations sent a record $51 billion overseas last year, almost one-and-a-half times more than the previous year. “The U.S. market was so strong in 1995 that it gave fund managers the opportunity to put more money overseas,” after they rebalanced their portfolios, said Carol Parker, research manager at InterSec Research Corp. in Stamford, Conn.
Investment overseas should be strong this year, too, as U.S. shares, as measured by the Standard & Poor’s 500 Index, jumped 23 percent in 1996. That follows a 37.6 percent return in 1995.
In total, U.S. tax-exempt institutions had $475 billion invested internationally as of Dec. 31, 1996, or about 11 percent of their total assets.
Out of last year’s $51 billion, $48 billion, or 94 percent, was invested in stocks.
Institutions put the largest portion of that money, $39 billion, into countries represented in Morgan Stanley & Co.’s Capital International Europe, Australasia and Far East Index. Another $10 billion was invested in emerging market stocks, up from $6.5 billion in 1995. At the end of the year, institutions held $35.6 billion in emerging market stocks.
Last year, small cap stocks attracted $1.1 billion and international bonds $1 billion.
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