Economics
Hedge Fund Killjoys Shun Reflation Trade That’s Sweeping Stocks
- BofA survey shows growth optimism rises the fastest on record
- Yet hedge fund positions show continued distrust in economy
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Bets on faster economic growth are suddenly all the rage in the equity market. But one group of sophisticated investors is sitting out the trade.
Hedge funds have remained steadfast this year in their aversion to companies seen as most poised to benefit from a pickup in economic growth, or reflation. As of mid-December, the industry was positioned cautiously, with cyclical holdings relative to defensive shares and exposure to growth versus value stocks both hovering near five-year lows, according to prime brokerage data compiled by Morgan Stanley.