Largest U.S. Pension Fund Adjusts Portfolio: Sells GE Aerospace and Tesla, Buys AT&T and Costco

The California Public Employees’ Retirement System (CalPERS), the largest public pension fund in the United States, made significant adjustments to its stock portfolio in the third quarter of 2024. The fund reduced its positions in GE Aerospace and Tesla while increasing its stakes in AT&T and Costco Wholesale. These changes were disclosed in a filing with the Securities and Exchange Commission (SEC).

CalPERS sold 718,713 shares of GE Aerospace, trimming its holdings to 2 million shares by the end of the quarter. The pension also halved its Tesla stake, selling 4.5 million shares to bring its holdings to 4.9 million shares. Meanwhile, the fund increased its investments in AT&T and Costco, signaling a strategic shift in its portfolio allocation.

When asked for comment, CalPERS stated via email, “CalPERS’ global public equities are largely managed using quantitative and systematic investment approaches. Consequently, we generally do not comment on individual holdings or trades.” The pension fund oversees more than $520 billion in assets, making it the largest public pension fund in the country.

Stock Performance and Context

GE Aerospace has experienced a strong year since its formation following the spin-off of GE Vernova in April. On a pro forma basis, its stock soared 85% in the first nine months of 2024, significantly outpacing the S&P 500’s 21% gain during the same period. However, the fourth quarter has seen a 4% dip in GE Aerospace shares, while the broader index is up 3.6%. The company’s robust third-quarter earnings suggest resilience, and its engine operations may remain unaffected by potential tariff disputes during President Donald Trump’s second term.

Tesla shares posted a modest 5.3% gain in the first nine months of the year but surged 34% in the fourth quarter, boosted by Trump’s reelection. Tesla CEO Elon Musk’s vocal support of Trump and his policies helped fuel optimism about the company’s prospects. However, there is uncertainty about how Trump’s potential rollback of electric vehicle (EV) purchase tax credits could impact Tesla’s sales performance.

Strategic Implications

CalPERS’ decision to cut back on Tesla and GE Aerospace comes amid broader market shifts and evolving economic policies under the new administration. At the same time, its increased investments in AT&T and Costco reflect a possible focus on sectors offering stability and steady returns.

As the largest U.S. public pension fund, CalPERS’ portfolio adjustments provide insights into how institutional investors are navigating a complex economic and political landscape.