Global Pension Funds Trim US Equities Over AI Concentration and Stretched Valuations

Major global pension funds are cutting their exposure to US equities to underweight positions relative to global benchmarks, citing elevated valuations and concentration risk in artificial intelligence megacaps. Funds moving underweight include Australia's $260 billion Australian Retirement Trust, Canada's $388 billion La Caisse, and the UK's £45 billion People's Pension, which reduced its allocation from 53% to 49%. Institutional concerns focus on AI-exposed companies comprising over a third of the S&P 500. Additionally, a Marsh survey of 430 institutions overseeing $5 trillion revealed that 33% plan to trim US equity holdings over the next year.