High beta sectors are approaching historic high rate of multiple appearances on stock screeners, with beta (consisting of financials, materials, consumer discretionary, industrials, and IT) making up 79% of multiple appearances compared to low beta sectors which are just 21% of multiple appearances.
“The low / high beta split is approaching historical extremes,” writes Morgan Stanley analyst Ronan Carr. The last two times the split was this wide were in July 2007 and mid-2010. “The former coincided with the end of the mid- 2000s bull market. In the latter period, MSCI Europe did experience a sizable tactical correction in April/May 2010 but then went on to deliver strong returns in 2H10 before peaking in February 2011.”
Carr argues that this...
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