The analysts at Bernstein place the blame on heightened stock correlations over the past six months, which hover near their highest since 2016 for the S&P 500 and Euro Stoxx 50, respectively.
While that’s not so dramatic, the stock-picking environment remains less favorable than last year, so it “may make sense for fund managers to decrease active risk somewhat,” Fraser-Jenkins and team wrote.
This article was provided by Bloomberg News.