As market volatility increased, so, too, did hedge fund exposure to low quality stocks, a Monday Morgan Stanley report observed. As a result, it’s time to “take some of the junk out of your trunk,” the report advises hedge fund managers. Morgan Stanley: High quality stocks out of favor on a relative basis Using a proprietary model to divide stocks into four quality categories — high, moderate, low quality or junk – the “time is now to increase exposure to higher quality stocks.” The U.S.-based Equity Strategy team, headed Adam Parker, reviewed free cash flow yield and valuation to note…
Morgan Stanley Instructs Hedge Fund Managers: "Get Junk Out of Trunk"
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.