Stock Pickers Just Suffered Their Worst Month in 20 Years
- Performance hurt by elevated cash holdings, energy underweight
- Defensive positioning proved costly when S&P 500 bounced back
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The renewed selloff in equities is offering bears a moment of vindication. But for professional stock pickers, the past month brought a reminder that being too defensive can be costly.
The two-month stock rout at the start of the year sent actively managed funds pouring into cash and loading up on bearish wagers. The moves turned sour during the frenetic rally in the second half of March. As a result, long-only mutual funds trailed their benchmarks on average by a full percentage point last month -- the worst performance since 2002, data compiled by Bank of America Corp. show.