November Themes Won’t Last: Morgan Stanley

So you capitalized on the post-election surge in U.S. equities, and gained equally by being short Mexico. Now what?

Investors might want to consider newer bets because this could be the end of easy street – industry- and country-focused themes don’t last longer than a month or two, according to Morgan Stanley.

In November, MSCI USA delivered 3.6% returns, while the MSCI World Index returned 1.5% net in dollar terms, while the MSCI Emerging Markets index sunk 4.6%.

“Industry momentum has been effective for 1-2 month holding periods in APxJ & EM and Europe, weak in North America and ineffective in Japan,” the bank said after a study of historical patterns...