Low Quality
November’s Giant “Low Quality Stock” Rally
While quant managers watched their factors failing one by one, and market bears stared at the tape in disbelief, the number of retail investors continued to multiply and we witnessed a dramatic performance advantage for low quality stocks. Are we entering a prolonged “junk-rally” cycle?
Low Quality Stocks Dominate
Investors brushed off a global economic slowdown and drove up the value of risky assets. Current low-quality leadership has been in place for eight months thus far.
Low Quality Dominance Since March
After two rough months moving into 2016, Low Quality stocks rallied and are now leading High Quality stocks YTD. Investors apparently brushed-off the slowdown scare from China, and later the Brexit headlines.
High Quality Stocks Slightly Underperform YTD
Even though Low Quality spends the majority of time outperforming, investors benefit exponentially from holding High Quality during the bad times.
Quality Stock Rankings: Low Quality Momentum Persists
Low Quality Momentum persists, and a look at how Valuation factors affect the Quality model output.
Low Quality Continues To Outperform
Despite rising market volatility, Low Quality stocks ended Q2 up 3.8%, slightly better than High Quality’s 3.4% gain. YTD, High Quality stocks are up 14%, just behind Low Quality stocks at +16.6%.
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