Morgan Stanley Instructs Hedge Fund Managers: "Get Junk Out of Trunk"

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 compelling values for US quality stocks. The rush...