Factor Quant Warns Everyone's Favorite Safety Trade Is Dangerous
- Defensive allocation styles are already trading near records
- Quant at SEI Investments frets valuations for quality stocks
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As recession fears swirl, investors are chasing like never before defensive strategies that won big in the crisis. A quant at a $335 billion firm says it may be a recipe for disaster.
A slew of safe stocks could prove anything but this time round -- they’re already crowded and expensive, warns Eugene Barbaneagra. That’s why the manager at SEI Investments Co. is snubbing a popular strategy tracked by systematic funds -- quality equities -- which now have diminished capacity to outperform.