Pro Analysis

Bespoke: When it comes to high- vs low-quality stocks, perspective is key

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We've discussed the performance of equities based on their credit ratings quite often over the last several years. In the early stages of the bull market, the list of outperformers was dominated almost in its entirety by low-quality stocks. Beginning in late 2014/early 2015, the relative performance of lower-quality stocks leveled off, and after peaking in early 2015, began to deteriorate ahead of the peak in the S&P 500. That underperformance continued right up until this past February at which point low-quality stocks bounced and bounced hard.