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Get Ready as ‘Beta-Chasing’ Stock Managers Try to Make Up Ground

  • BofA sees year-end beta chase due to poor fund performance YTD
  • Money managers rush to buy stocks at a rate not seen this year
Times Square As Tech Shares Lead U.S. Stocks Higher
Photographer: Michael Nagle/Bloomberg

It’s been the same trade all year. A recession is coming, so get defensive. Now the strategy is unwinding and stock managers who toed the line all the way into November have furious catching up to do.

That’s bad if you’re in charge of an equity portfolio that’s straggling. But for anyone hoping to ride along with more upward momentum in the market, the effect has been the opposite. Stocks just rallied for a fifth week, tying the longest streak in two years, spurred by a rotation into high-volatility shares.