Trump threatens tariffs as a coronavirus payment. And rumor has it, he wants to ban a government pension fund from holding Chinese stocks.
President Trump has gone ham on China this week.
The latest are threats of coronavirus pay-back tariffs and reported bans on the iFund — a $50 billion government retirement account holding money for ex-military — from benchmarking to an MSCI Index which holds China securities.
The Thrift Savings Plan, the $700 billion government employee 401(k) system, is said to be switching from the MSCI EAFE Index to invest in the MSCI All-Country World Index (ACWI), which has about 4% in China stocks. This switch would be for the iFund, held by retired military personnel.
The Sinclair Broadcasting Group reported Thursday that insiders close to the president said he was considering an executive order to ban the switch to the MSCI ACWI, which had around $337 million invested in Alibaba
BABA (BABA), the only China stock in the indexes top 10 holdings and its biggest investment.
Outside consultants, including heavy hitters from Wall Street, had recommended the new index as a better source of growth for retirees. The index is up 6.45% over the last 10 years while the EAFE, which invests in Europe, Australia and Japan, gained 3.2%.
Opponents to the investment shift include Senator Marco Rubio (R-Fla) and Jeanne Shaheen (D-NH), who believe U. S. military should be investing in Chinese companies that are sanctioned or were once banned from doing business with the U. S.
Most of the China components in the index are benign, including all of the big Chinese banks, oil and gas firms, biotech and online education names.
