Over the last three months, the “beta trade” has been on. We slice all 1,600 companies in the MSCI World index into deciles from lowest beta to highest, and then we measure the performance of each decile. Over the last three months, the beta factor alone has explained 89% of the movement of MSCI World index stocks. While the relationship took a pause over the last month, it snapped back into gear yesterday. We’ll be watching this closely to see if it continues. With the Citigroup Economic Surprise Index rolling over and at least one well known economist taking down 4Q GDP estimates by 1%, a period of low beta outperformance may be at hand.