The manager of Wisconsin’s pension more than halved its AT&T stake in the first quarter. It also tripled its holdings of Tesla stock, and bought more McDonald’s and NIO shares.
David Paul Morris/Bloomberg
One of the best-funded state public pensions made major investment changes in the first quarter.
The State of Wisconsin Investment Board manages the state’s trust funds, 91% of which are in the Wisconsin Retirement System. The WRS, as the pension is known, had a net Investment position of $116.5 billion as of the end of 2019, according to its latest annual report. It is the eighth largest public pension in the U.S., and 25th largest in the world.
Also, unlike most U.S. state pensions, WRS is fully funded. A 2020 study by the Pew Charitable Trusts found that the average state pension only had 70.7 cents for every dollar of obligation.
The investment board halved its AT&T (ticker: T) stake in the first quarter, and more than tripled its investment in electric-vehicle giant Tesla (TSLA). The agency also bought more shares of burger giant McDonald’s (MCD) and Chinese EV maker NIO (NIO). The investment board disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission. The pension manager didn’t respond to a request for comment on the stock trades.
The agency sold 963,848 AT&T shares to end March with 677,727 shares of the telecom giant.
AT&T stock rose 5.2% in the first quarter, just behind the S&P 500 index’s 5.7% rise. So far in the second, however, shares have slipped 2.8%, while the index has gained 5.8%.
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AT&T shocked investors earlier this month when the company announced that its dividend would be reduced in the course of restructuring. AT&T is leaving the media business, and will focus on telecom. CEO John Stankey said the lowered dividend “will still be incredibly attractive relative to other dividend opportunities in the market.” Shares slipped after the announcement, but Stankey bought AT&T stock on the open market.
The investment board bought 71,910 more Tesla shares to end the first quarter with 104,410 shares.
Tesla stock has been rolling downhill so far in 2021. Shares slipped 5.3% in the first quarter, and so far in the second they have lost 6.4%.
A string of unfavorable headlines have weighed on Tesla stock as of late. Still, shares are liable to rise sometimes on no apparent news. Tesla’s large position in Bitcoin could have dipped into the red with the cryptocurrency’s drop. In any case, CEO Elon Musk has said Bitcoin would no longer be acceptable for payment for Tesla vehicles, citing environmental reasons.
McDonald’s stock rose 4.5% in the first quarter, and so far in the second, it has gained 4.3%.
The fast-food-giant crushed estimates when it reported first-quarter earnings in late April. McDonald’s in May said it was increasing wages in company-owned stores.
The investment board bought 57,450 more McDonald’s shares in the quarter to end with 430,251 shares.
The agency bought 69,077 more NIO American depositary receipts to raise its investment to 192,337 ADRs.
NIO ADRs tumbled 20% in the first quarter, and have slipped 1.0% so far in the second.
NIO faces the chip shortage that is hurting several industries, and increased competition. NIO has noted that it expects the semiconductor issue to ease over June and July.
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 [email protected] and follow @BarronsEdLin.
