A strong stock market delivered the goods and then some for pension funding levels, both public and corporate, in the first quarter. But don’t expect companies to pull back from their campaign to shift into safer (if low-paying) bonds from stocks.

That’s the conclusion from JPMorgan’s global market strategy team, which noted in a report that this development didn’t mean that corporate plans would ease up on their de-risking—that is, moving into bonds from stocks. Reason: Company defined benefit (DB) plans already are almost fully funded, so why bother grabbing alpha from equities?

In fact, corporate fund chiefs are best advised to lock in their comfortable positions by continuing the de-risking campaign, wrote Morgan’s team, headed by Nikolaos Panigirtzoglou. His report contended that “the bigger the funding position and the closer pension funds are to fully funded status, the higher the incentive to de-risk.” So the liability-driven investing (LDI) movement, the embodiment of the de-risking trend, will keep on keeping on.

After all, few expect any major gyrations from the fixed-income market. Federal Reserve Chair Jerome Powell has signaled that near-zero short-term interest rates will prevail for at least the next couple of years. And the run-up in longer-maturity bonds seems to have reached a ceiling.

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