Usually, as the BOTB adapts to unfolding market trends somewhere between a half and two-thirds of funds remain the same from month to month. It's unusual to see wholesale changes in the BOTB from one month to the next. But if you go back through these monthly summaries you will see that it does occur but only when there is a complete shift in market sentiment. That is what we've experienced since mid-February when the reflation trade gripped markets.
As I explained in April's monthly newsletter, during March "Asian equities and the Nasdaq 100 were dragged down by technology stocks and US-China political tensions the S&P 500, Dow Jones and the German Dax all powered to new all-time highs after a weak start to the month". Meanwhile, value stocks outperformed growth stocks around the world.
Momentum trades that had been outstanding performers over the last 12 months started lagging over the last 6 weeks, while 2020's losers became the new winners.
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