Displaying items by tag: equities
Large-Cap Blend Funds to Outperform as Growth Returns to the Market
Large-cap blend funds, core holdings that mirror the U.S. stock market, have posted strong results, returning 15.84% over the past year, 22.50% annually over three years, and 14.81% over five. Morningstar data identified 15 standout funds with top-quartile returns across one-, three-, and five-year periods, including American Funds Fundamental Investors, AQR Large Cap Multi-Style Fund, and Vanguard 500 Index Fund.
The American Funds Fundamental Investors fund rose 23% in the past year, boosted by global exposure and a refreshed management team, while The Investment Company of America fund gained 22.25% with a balanced focus on dividend growth and capital appreciation.
AQR’s Large Cap Multi-Style Fund outperformed its peers with a 23.52% annual gain, leveraging value, momentum, and quality factors to manage market sensitivity efficiently.
Finsum: These funds demonstrate that disciplined diversification, data-driven strategy, and cost efficiency continue to drive superior long-term performance.
This Mega Bank is Telling Investors to Buy Value
Bank of America is urging investors to focus on high-quality value stocks as markets show signs of overheating and sentiment shifts toward more defensive strategies. In its Small/Mid Cap Factors report, the bank noted that while small-cap value stocks lagged in the third quarter, they are now positioned for a rebound.
Analysts pointed to several signals suggesting stronger prospects for value stocks, including the U.S. Regime Indicator’s recent shift to a “Recovery” phase, historically favorable for value leadership.
The report also emphasized that value stocks tend to outperform during Federal Reserve rate-cut cycles, similar to the current environment. Bank of America highlighted that value has started to outperform in mid caps, even as growth stocks continue to rally, noting that the “low-quality rally is in its later innings.”
Finsum: Turning to fundamentals could be the play with rate cuts on the horizon and an shaky economy.
Investors are Flocking to Global Equities
Global investors are increasingly reallocating away from U.S. equities, even as Wall Street continues to notch record highs. Fund-flow data from Société Générale and EPFR show record inflows into global equity funds that exclude U.S. stocks, signaling a push for broader diversification.
Europe and emerging markets have benefited most from this trend, with European equity products seeing record inflows this year. Currency effects and heightened U.S. policy risks under the Trump administration have also encouraged investors to look abroad.
While many acknowledge the U.S. remains the world’s deepest and most dynamic market, its high valuations and narrow leadership have amplified concentration risks.
Finsum: Portfolio managers showed a more globally balanced approach, blending exposure to the U.S. with selectively priced opportunities overseas.
Large Cap Growth Outperform Other Factors
The U.S. stock market set new highs in Q3 2025, and while index funds largely outperformed, active funds were more mixed. Among the 10 largest active funds, only the JPMorgan Large Cap Growth Fund stood out, returning 9.3% and ranking in the top third of its category, while the Dodge & Cox Stock Fund lagged with just 3.2%.
Index funds fared better, with the Vanguard Total Stock Market Index Fund delivering 8.2% and ranking highest among its peers, though the Vanguard Mid Cap Index Fund landed near the middle of its category.
Over the past three years, seven of the 10 largest active funds have outperformed their categories, led by two Capital Group funds that landed in the top decile of large-cap blend. Index funds also showed consistent strength, with S&P 500 trackers like Vanguard, Fidelity, and iShares ranking in the top quartile over that period.
Finsum: Investors looking to capitalize on falling interest rates should look to large cap growth as they tend to be more interest rate sensitive.
One of the Biggest Model Managers Shifts Hard into Risky US Equities
BlackRock is increasing its bets on U.S. equities and artificial intelligence across its $185 billion model-portfolio platform, according to a new investment outlook. The firm shifted allocations away from international developed markets, leaving its models 2% overweight equities and triggering billions of dollars in ETF flows.
The move reflects confidence in a rally that has pushed the S&P 500 to record highs this year, fueled by strong earnings, enthusiasm for AI, and expectations of Federal Reserve rate cuts. BlackRock pointed to U.S. corporate earnings growth of 11% since late 2024, far outpacing developed peers at under 2%.
The firm also reallocated tech exposure, moving from a broad tech ETF into an AI-focused fund, which attracted nearly $1.4 billion in a single day.
Finsum: As BlackRock put it, AI is both a growth driver and a defensive tool for portfolios.