In our view, still-resilient growth and Fed easing will continue to support S&P 500 performance at the index level, but company-level drivers have become increasingly important, driving greater dispersion in returns. The 3-month average correlation between the stocks in the S&P 500 has fallen to its lowest level in nearly a decade at just 9%. In this environment where micro matters, we believe there are opportunities to capitalize on the increase in dispersion through strategies such as active management and tax-loss harvesting.
