U.S. pension funds are projected to shift $12 billion into bonds from stocks in a rebalancing of their investments at the end of January, amid a rebound in the stock market following a sharp sell-off in late 2018, Wells Fargo Securities analysts said.

The expected reallocation into fixed income from equities was far below the estimated $65 billion that occurred in late December, the analysts said in a research note.

"If the year-end pension rebalancing was a major market earthquake, the upcoming January month-end shift would only qualify as a modest aftershock," they wrote.

So far in January, the S&P 500 index has risen 6.4 percent, while a gauge that tracks the U.S. investment-grade bond market compiled by Barclays and Bloomberg has increased 0.43 percent.

"Pension flows would be heftier if this were quarter-end, rather than 'just' month-end, since some funds adjust their asset-allocation mix less frequently," the analysts said.