Battered Quants Get Shot at Redemption in the Stock Rotation
- Monday’s rotation, if sustained, could help quant strategies
- Hedge funds cling to tech bets with quant exposure still muted
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For quants battered by a stock rally built on Big Tech, Monday’s record rotation brought sweet relief. But it’s going to take far more than one dose of good news to save their long-suffering strategies.
After Pfizer Inc.’s vaccine candidate buoyed hopes for a post-pandemic world, a momentum investing style stuffed with defensive stock bets crashed, breaking records going back to 2000. An equal-weighted S&P 500 beat the regular cap-weighted one by the most ever, a sign of weakening mega-cap dominance. Volatile shares had their best day in nearly two decades.