Great Rotation (from bonds to stocks)
The term “Great Rotation” was coined in 2010 by Michael Hartnett, the Chief Global Equity Strategist of Bank of America Merrill Lynch Global Research. Bank of America Merrill Lynch published the RIC-Monthly Investment Overview on January 11, 2011 and on October 9, 2012, with both reports describing the coming “Great Rotation” from bonds into stocks. “The era of bond outperformance has ended,” the October 9, 2012 report declared.
If money flows from stocks into bonds (a reverse of the “Great Rotation”), that might also be called a “Great Rotation,” as James Saft of Reuters wrote in “A new Great Rotation?” on April 13, 2012.
Wall Street Journal—MarketBeat
October 22, 2010, 10:43 AM
An Armageddon Scenario (Just a Tail Risk!)
By Dave Kansas
Matt Phillips pointed out just a little bit ago that cash continues to pour into emerging markets. And many chin-scratchers think that the Federal Reserve’s quantitative easing program will leak (gush?) into emerging markets, undercutting the efficacy of the QE program and pumping up a massive emerging markets bubble.
That’s the most likely of three post-QE scenarios says Michael Hartnett, chief global equity strategist over at Bank of America Merrill Lynch. And Matt’s recent post would back that up. The second scenario is called “the great rotation” which boosts global equities and major banks.
Corp.BankofAmerica.com
RIC-Monthly Investment Overview
11 January 2011
Pg. 5:
Positioning: The great rotation from bonds to equities
While sentiment toward equities has picked up in recent weeks, individual investors have been overwhelmingly pro-fixed income and anti-equities over the last two years (Chart 1). In 2009 and 2010, fund flows into fixed income funds as a percent of assets under management totaled a massive 19% and 10%, respectively. The outperformance of equities over the same two-year period and the stark contrast between the health of the corporate and government balance sheets are likely to cause rotation out of bond funds into equity funds in 2011.
The Economist
Shifting sands
Investors are worried, but more about inflation than demonstrations
Feb 10th 2011 | NEW YORK
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Much of the money that has come out of emerging economies has gone straight into developed markets, in what Michael Hartnett at Bank of America Merrill Lynch has dubbed the “Great Rotation”.
Business Insider
10 Ways For Investors To Get Rich On THE GREAT ROTATION
Gregory White | Feb. 10, 2011, 9:38 AM | 20,815 | 5
What was once hated in 2010, is now loved in 2011, according to the latest report from Bank of America Merrill Lynch.
Bank strategists Michael Hartnett and Joseph Zidle call it “The Great Rotation,” and it’s showing up across asset classes.
Reuters
A new Great Rotation?
By James Saft APRIL 13, 2012
(Reuters) – One of these days, and it might start soon, investors are going to begin to reverse their multi-year rotation out of stocks and into bonds.
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Michael Hartnett and Kate Moore, equity strategists at Bank of America Merrill Lynch, call the coming move to stocks “The Great Rotation” and argue it will affect profoundly what does well and what poorly. Thinking in five-year increments they argue that the rotation, when it comes, will largely up-end where the winners in markets can be found. Rather than creditors, debtors should outperform while equity will outperform credit and cash do better than gold.
MerrillEdge.com
RIC-Monthly Investment Overview
09 October 2012
Pg. 1:
2013 could mark start of the Great Rotation
The era of bond outperformance has ended. Equities have staged a remarkable stealth rally, with US stocks not only outperforming Treasuries over the past one and three years, but also the past 10 years. And still, the consensus asset allocation is long bonds and short stocks. However, if the US successfully navigates the fiscal cliff, Europe continues to stabilize and Chinese growth reaccelerates, in our view 2013 could mark the start of the Great Rotation
24/7 Wall St.
BofA Outlines 2013: The Great Rotation from Bonds to Stocks
Posted: October 9, 2012 at 12:44 pm
Bank of America Merrill Lynch has its key RIC Report out this week effectively telegraphing what would be The Great Rotation away from bonds. The report is titled “The Bond Era Ends” and it outlines how 2013 could end up being the year of the great rotation from bonds to stocks.
MarketWatch
The Great Rotation: Why bond buyers should worry
Commentary: Central bankers’ bubbles lure investors to stocks
October 10, 2012
SAN FRANCISCO (MarketWatch) — Up and down Wall Street, occupants of corner offices are calling to investors like old-school newsboys hawking “Extra” editions of their newspapers. Read all about it! Bonds are dead! Put money in stocks!
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Now the investment strategists at Bank of America Merrill Lynch are weighing in with an audacious call: We are at the cusp of a “Great Rotation” into stocks from bonds, courtesy of accommodative central bankers.