S&P's decision to downgrade the US has tempted none of the Global Pensions 100 Panel with holdings in US Treasuries to sell.
Some 66.7% of respondents said their exposure would remain the same despite S&P’s controversial decision last month to downgrade the US’s AAA credit rating for the first time since it won the ranking in 1917.
The remaining 33.3% of panel members do not hold US Treasuries in their portfolios.
Explaining the downgrade, the credit rating company said “political brinkmanship” in the debate over the debt had made the US government’s ability to manage its finances “less stable, less effective and less predictable”.
“It’s always possible the rating will come back, but we don’t think it’s coming back anytime soon,” said David Beers, head of S&P’s government debt rating unit.
One investor said: “I still believe US Treasuries are the best proxy for risk management issues,” while another argued the rating was “not very informative or relevant”.
A third claimed: “We agree with Buffett!” after the billionaire said S&P had erred, while reiterating his view the economy would avoid its second recession in three years.
Buffett added the US merited a “quadruple-A” rating. “Financial markets create their own dynamics, but I don’t think we’re facing a double-dip recession. Clearly what stock markets do have is an effect on confidence, and this sell-off can create a lack of confidence,” he said.
The Global Pensions 100 Panel was launched in July 2006 and every month asks pension funds two topical questions on events in the pensions industry.
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