Negative Years for High Beta Stocks 1997-2020

This chart illustrates how in periods when high beta stocks struggled, the broader market tended to struggle as well, but to a lesser degree.

Therefore, investors may potentially benefit by implementing strategies that short high beta stocks to better protect against capital loss during market downturns. This approach may improve a client’s overall experience—keeping them invested across market cycles so that portfolio assets can continue to work and the power of compounding can be fully realized over the long term.

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Past performance is not indicative of future results. Source: Morningstar. Data from 01/01/00 – 03/31/21.

Beta measures a fund’s sensitivity to market movements. The beta of a market is 1.00 by definition. Q5 is quintile 5 (the highest beta stocks).The S&P 500 Index is a commonly recognized, market capitalization weighted index of 500 widely held equity securities, designed to measure broad U.S. equity performance. It is not possible to invest directly in an index.

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