The Current Landscape of Style-Box Returns
Understanding the performance of various style boxes based on iShares style-box ETFs is crucial for investors looking to make informed decisions. Let’s delve into the trends and shifts that have been observed in recent years:
Large-Cap Growth Dominance
- In 2023 and 2024, large-cap growth emerged as the leader with impressive returns of over +25% each year.
Value Style Resilience
- While value style showed strong relative performance in 2023, it faced a significant dip in 2024.
- However, the first quarter of 2025 witnessed a resurgence in value style performance before growth staged a comeback.
SMID Performance Analysis
The vertical black-bordered boxes in the spreadsheet highlight the style-box returns for the full years of 2023 and 2024. Additionally, the horizontal black-bordered box sheds light on the underperformance of SMID (small and mid-cap value) over the past 10 to 15 years.
The 10-year returns for mid-cap value and small-cap growth and value have been notably poor despite being popular choices post the 1982 to 2000 bull market.
Key Takeaways and Reflections
These observations serve as a valuable record of style performances, offering insights into the ever-evolving market dynamics:
- Large-cap growth has been a standout performer, but caution is advised due to potential overbought conditions.
- The steadfastness of small-cap value and mid-cap value strategies is commendable amidst the allure of growth and tech sectors.
- As we navigate this aging secular bull market since March 2009, it’s essential to monitor underperforming styles for potential opportunities.
Disclaimer
It’s important to note that the information provided is not intended as financial advice or a recommendation. Past performance does not guarantee future results. All annual return data is sourced from Morningstar and may not be updated promptly. Thank you for reading and staying informed.