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  • Actively managed funds have some ill-advised bets heading into 2022, in Bank of America’s view.
  • Savita Subramanian, the firm’s top equity strategist, shared why pro investors may go wrong.
  • Inflation and the Omicron variant are complicating the investing landscape, but opportunity remains.

As the stock selloff intensifies, Bank of America’s top equity strategist has a suggestion for investors: Don’t follow the pros.

Major US stock market averages have sold off by as much as 5% since Thanksgiving, and active fund managers appear to be ill-positioned for the rapidly shifting environment, wrote Savita Subramanian, BofA’s head of equity and quantitative strategy, in a December 1 note.

There are three key reasons why mimicking the so-called “smart money” may be a dumb move right now: Fund managers are unprepared for inflation, overweight large stocks, and highly concentrated in growth names instead of their value counterparts.

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