Last week’s focus was on real rates rising while growth stocks kept outperforming value ones. This week we follow up with a focus on one of the potential explanations to this situation: positioning.
Need to know
- In spite of rising real yields, growth stocks are outperforming value ones, presenting a puzzle for investors
- Part of the puzzle resolves when we look at the positioning of hedge funds: growth stocks have been under-owned, unlike value ones
- Historically, when positioning is as low as it is today on a given type of stock, expected returns turn positive in the subsequent months: the current upside in growth stocks could continue for that reason
The macro situation remains quite uncertain at the moment. This, in our eyes, is all the more reason to start looking at other potential factors to explain market returns. Sentiment, and more importantly positioning, could very well drive markets in the coming weeks – taking the lead once more until the first few days of September – making it worthy of investigation.
You can now read the full whitepaper at the link below
