Feb
21
Hedge Funds Continue to Chase the Herd With Record Momentum Bets
By-
Managers bet on past winners the most in at least seven years
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Momentum-value correlation level also historically high
Hedge funds can’t get enough of momentum — even if it means embracing an investing strategy they hate.
Loosely defined as betting on shares that went up the fastest over the preceding nine-to-12 months, hedge funds are the most reliant on momentum strategies since at least 2010, according to an Evercore ISI analysis of 13F filings with the Securities and Exchange Commission. Meanwhile, they’ve reduced their bearish bet on value stocks, which are priced at deep discounts to earnings and assets, for the first time in nine quarters, the study shows.
Investors rarely take on momentum and value positions at the same time, which is what’s happening now…
Hedge Funds Continue to Chase the Herd With Record Momentum Bets
