A growing cohort on Wall Street frets a sharp reversal could soon hit this year’s stock melt-up now that fast-money quants have ramped up their speculative bets.

But the real money has the potential to grab the baton even if these systematic players slow down.

Still-tepid inflows into mutual funds and exchange-traded funds, coupled with hordes of cash in safe assets, suggest there’s plenty of ammo to power the new-year rally, according to Goldman Sachs Group Inc.

The upbeat projection is a counterpoint to warnings that extreme positioning among quantitative funds with echoes of the February 2018 peak is setting up equities for a fall.

“There may still be room for a more bullish rotation alongside the better growth/rates mix we expect,” Goldman strategists including Alessio Rizzi and Christian Mueller-Glissmann wrote in a note Tuesday.

The bank isn’t alone in flagging the opportunity for investors to play catch-up, with Ray Dalio encouraging the risk-on move this week. “Cash is trash,” the Bridgewater Associates LP founder said in an interview with CNBC at the Davos conference. “Get out of cash.”

Flows into stocks have trailed the advance in risky assets, with the divergence between equity-fund intake and market performance last year among the largest on record, according to Goldman.

Deteriorating business-activity indicators and the strong dovish pivot from central banks supported allocations into high-quality debt and money-market funds in 2019 -- while curbing equity inflows despite double-digit market returns.

Some of that has only recently begun to change.

“Cyclical sectors have attracted inflows for the first time after almost two years, while defensive equities such as low vol stocks have started to see some outflows,” the strategists wrote.

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