Oregon Pension Fund Reduces Positions in Chip and Auto Makers

The Oregon Public Employees Retirement Fund (OPERF) has made significant changes to its investment portfolio, including reducing positions in some of its largest holdings. The pension fund sold approximately one-fifth of its investment in chip maker Nvidia (NVDA), as well as about a quarter of its stakes in chip maker Intel (INTC), and auto makers Ford Motor (F) and General Motors (GM). OPERF disclosed these stock trades, among others, in a form filed with the Securities and Exchange Commission.

OPERF did not provide any comment on these investment changes. Overall, the pension fund reduced its U.S.-traded investments from $8.4 billion at June 30 to $7.3 billion at Sept. 30. With total assets amounting to $95.9 billion at the end of 2022, OPERF currently ranks as the 16th-largest public pension in the U.S. based on assets.

During the third quarter, the pension fund sold 92,207 shares of Nvidia, leaving it with a total of 392,422 shares by the end of the quarter. Despite experiencing a 50% drop in 2022, Nvidia stock more than tripled in the first nine months of 2023. In the fourth quarter, Nvidia shares have already increased by 3.4%. By comparison, the S&P 500 index rose 12% in the first nine months of 2023, following a 19% decrease in 2022. As of now, the index has increased by 1.6% in the fourth quarter.

Nvidia has demonstrated strong earnings this year, leading to enthusiastic support from both analysts and investors. The rising demand for Nvidia chips, particularly in generative artificial intelligence applications, has contributed to the company’s success. However, it is worth noting that challenges related to China may be a focus during the upcoming fiscal-third-quarter earnings report on Nov. 21.

Meanwhile, Intel CEO Pat Gelsinger emphasized the importance of maintaining engagement with China amidst tensions between the country and the U.S. In late October, Gelsinger himself took steps to increase his ownership of Intel stock. While Intel stock has not experienced the same level of growth as Nvidia this year, the company’s earnings have remained strong.

Overall, OPERF’s decision to reduce positions in chip and auto makers reflects a strategic adjustment to its investment portfolio. These changes are consistent with its ongoing efforts to optimize returns while considering market dynamics and potential challenges.

Intel Stock Performance

Intel stock has experienced significant fluctuations in recent years. In 2022, there was a notable drop of 49%. However, the first nine months of 2023 showed a promising recovery, with the stock rising by an impressive 35%. Furthermore, in the fourth quarter, shares have already surged by 7.3%.

During the third quarter, OPERF made a strategic move by selling 574,828 Intel shares, ultimately leaving them with 1.8 million shares in their portfolio.

Ford’s Rollercoaster Ride

Similar to Intel, Ford stock has had its fair share of ups and downs. In 2022, there was a significant decline of 44%. However, the first nine months of 2023 saw a positive growth of 6.8%. Unfortunately, this momentum did not last, as the fourth quarter brought about a decline of 15% in shares.

Ford faced various challenges during this period. A United Auto Workers strike had a significant impact on their stock performance. Despite this setback, Ford managed to outperform GM in electric vehicle deliveries. However, the electric-vehicles business continued to report losses, and third-quarter earnings fell short of expectations.

To maintain a balanced investment portfolio, the pension decided to sell 622,672 Ford shares during the third quarter, reducing their stake to 1.9 million shares.

GM Struggles Under CEO Barra

GM has faced considerable challenges under the leadership of CEO Mary Barra. The stock faced a drop of 43% in 2022 and a further decline of 2% in the first nine months of 2023. The fourth quarter has continued this downward trend, with shares down by 9.7%.

While GM was the last among the Detroit Three to settle with the UAW following a strike, it experienced a positive outcome in terms of stock upgrade, similar to its peers.

It is worth noting that our analysis in October referred to GM as a “value trap,” due to its poor performance under CEO Mary Barra.