Equity Market Commentary Q1
Market rotation to start 2025 eclipsed by tariff turbulence
David Polak
Equity investment director
Mike Pollgreen
Investment product manager
Key takeaways for the quarter ended March 31, 2025
- Investors should consider remaining balanced with geographic diversity, exposure to dividend payers and growth that isn’t too concentrated.
- Markets saw pronounced broadening in the first quarter of 2025, with international stocks outpacing U.S. stocks and value indexes outpacing growth indexes.
- While defensive and higher yielding equities did well, information technology was a particular laggard both in the U.S. and globally.
The start of 2025 showed early signs of a shift in equity markets after a long run of narrow leadership that was defined by dominant U.S. and growth stocks. Markets are broadening, and a sustained market rotation feels long overdue.
We should note that, in the days since the first quarter ended — the period which would normally close the chapter on this commentary — a lot has already changed. President Trump’s major tariff announcement has roiled markets, with major U.S. indexes seeing their worst single-day sell off since the onset of COVID in March 2020. All three major U.S. indexes (S&P 500 Index, Nasdaq Composite Index, Dow Jones Industrial Average) have entered correction territory, and the Russell 2000 Index, a proxy for small-cap stocks, has crossed into a bear market.*
This shift comes just months after markets were buoyant following the election, a time when many economists, including at Capital Group, felt markets had room for continued growth. In the time since, the Trump administration’s trade policy has graduated from distraction to headwind, ushering in new elements of uncertainty for investors and businesses alike.
While April 2 and the aftermath of the tariff announcement are sucking all the oxygen out of the room, signs of a new investment landscape had begun to show earlier in the year.
Markets are beginning to broaden
Non-U.S. markets pull away from the Magnificent 7 and U.S.
Sources: Capital Group, FactSet, Morningstar. P/E = price-to-earnings. Magnificent 7 = Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA and Tesla. Data from 1/1/25 to 3/31/25. P/E ratio for Mag 7 is equal-weighted and reflects average P/E ratios across listed companies. The P/E ratio for the S&P 500 Index, MSCI All Country World Index (ACWI) ex USA Index and Germany DAX Index are market-cap weighted. The average forward year (FY1) price-to-earnings ratio (P/E) is computed by dividing the stock price by the consensus earnings estimates for 2025.
Past results are not predictive of results in future periods. The indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.
Equity markets include more than one group of stocks
Index cumulative returns (%) since July 2024 show sustained broadening
Sources: Capital Group, Morningstar. As of 3/31/25.
In the first quarter, the S&P 500 was down 4.3%, giving back post-election gains from late 2024 and early 2025. Amid that slide in U.S. markets, international markets saw strong results with the MSCI All Country World Index (ACWI) ex USA Index up 5.2%. A strong quarter for international equities was propelled by European markets, as represented by the MSCI Europe Index, which was up 10.5% on the quarter.
A similar shift toward value took hold in the first quarter, with the MSCI ACWI Growth Index down 6.9% and the MSCI ACWI Value Index up 4.8%.
With tariffs taking the spotlight, the Federal Reserve was pushed from center stage of late, as it had been looking to tame inflation without sending the economy into a recession. It now seems that other forces could be responsible.
Just days before quarter end, the University of Michigan Survey of Consumers, which measures consumers’ sentiment towards the economy, showed a steep drop – down 7.7% month over month and 22.4% year over year – a potential canary in the coal mine which has borne out at the start of Q2.
In the first quarter, investors seemed to grapple with the uncertainties and potential headwinds to come. This type of sentiment is often followed by a flight to quality and defensive stocks, something we have been expecting (albeit in different circumstances) and have begun to see in the days and weeks since.
Market conditions at the start of the year included some signals that a contraction could be in the offing, alongside a clean bill of health from many economists. Last year was the second-consecutive year of over 20% growth in the S&P 500. The last time that happened was in the build-up of the dot-com bubble.
The imbalance between U.S. and international had also reached a tipping point last November, which was one of the worst months ever for the MSCI ACWI ex USA in comparison to the S&P 500. This was last seen in November 2016, the last time President Trump was elected to office. In the 12 months that followed, that dynamic sharply reversed, and the MSCI ACWI ex USA outpaced the S&P 500.
While the domestic outlook remains murky, there are causes for optimism abroad. The U.S. turning inward has served as a wake-up call for Europe, evidenced by the infrastructure and defense spending measures in Germany championed by incoming chancellor Friedrich Merz.
A reminder of the importance of long-term investing
Just weeks ago, this outlook would have been more bullish on markets, as it seemed that investor sentiment in the U.S. was more dire than returns, while global equities were seeing an overdue moment of outperformance. However, in the days since the quarter turned over, more uncertainty has rocked markets.
These developments remain unsettled, and how things will shake out remains unclear. It is in this type of environment that stock selection takes on outsize importance and a holistic approach can stand out. This was the case in the first quarter, as the narrow U.S.-and growth-led market seemed to lose its iron grip. These turbulent markets serve as a reminder of the importance of stock choices and staying the course for long-term results rather than chasing headlines and volatility.
Capital Group equity-focused funds and ETFs update
American Funds mutual funds results based on F-2 share class, ETFs based on NAV. Unless otherwise noted, all data refer to 1/1/25 to 3/31/25.
During the first quarter, results of our equity-focused funds ranged from -7.81% for CGGR Capital Group Growth ETF to 7.50% for International Growth and Income Fund (IGI).
We feel that, in the broadening environment of the first quarter, many of our funds behaved as we expect them to. As international indexes outpaced the U.S., many of our international and global funds advanced, as did our more income-oriented U.S. funds. Our U.S. growth funds ranked in the top quartile against Morningstar peers despite declining in the quarter. Global small-cap equities also declined amid the turbulent market environment.
In total, 69% of our equity funds (22 of 32) outpaced their primary prospectus benchmark. Relative to our Morningstar peer groups, 75% of our equity funds (24 of 32) were in the first or second quartiles.
U.S.-focused funds (Q1 2025)
In a quarter that briefly reached correction levels in the U.S. stock market, our funds with more of an income focus in their objectives produced the best results. For example, all of our U.S. growth and income funds outpaced their primary prospectus benchmarks in the quarter, doing so by an average of 378 bps.
The value-led market of the first quarter reminded investors that diversification plays a crucial role in long-term investing. Two of our more conservative U.S. equity-focused funds, American Mutual Fund (AMF) and CGDV Capital Group Dividend Value ETF, returned 2.47% and 1.41% in the quarter, and both outpaced their benchmark by more than 500 bps – among the highest excess returns across our equity offerings. These funds emphasized defensive or higher yielding sectors, such as health care and industrials. These positions benefited in the quarter from a flight to quality, dividend-paying companies with less volatility, and companies less correlated to macroeconomic swings.
The Investment Company of America and Fundamental Investors, two mutual funds that balance growth investments with income-oriented investments, outpaced their benchmark by 132 bps and 111 bps, respectively. Both ranked in the second quartile against peers.
Our U.S. growth funds, AMCAP, Growth Fund of America (GFA) and CGGR, declined in the quarter but fared better against active peers in the Morningstar U.S. large growth category. Exemplifying our belief that the Magnificent 7 are not a monolith, positioning among large technology-oriented companies detracted in some areas and added to others. The funds trailed their broad-based benchmark but meaningfully led the Russell 1000 Growth Index and peers, with AMCAP and GFA ranking in the top quartile of large growth peers.
International and global funds (Q1 2025)
Our international and global funds benefited from generally strong markets beyond U.S. borders. Some 65% of our equity international and global funds (11 of 17 funds) advanced in the quarter. Additionally, 59% (10 of 17 funds) outpaced their benchmark.
IGI produced strong returns (7.50%, 227 bps more than the benchmark). The fund benefited from strong stock selection, including in European industrials, as well as a focus on areas of the market that did well, such as European banks and insurance companies.
EuroPacific Growth Fund advanced in the quarter and ranked in the second quartile against peers but lagged its benchmark. Areas of focus for the fund have been impacted by tariff concerns. For example, some perceive Novo Nordisk and Daiichi Sankyo as susceptible to drug-related tariffs. As it is a long-term, core-growth fund, we are willing to stick to our long-term convictions despite short-term volatility. A recent Capital Ideas piece details some of the ways we think about tariffs and the impact they could have on companies and the broader economy.
In our global funds, the U.S. market continues to offer many compelling opportunities, and so do markets abroad. While we are leaning into select Mag 7 and other growth giants that were sold off in the U.S., we are also embracing the long-term potential of international companies.
CGDG Capital Group Dividend Growers ETF, a global dividend growth ETF, exemplifies the strength of our global investing capabilities. The fund returned 4.96% in the quarter, which is 629 bps more than the benchmark, in part due to strong stock selection and regional positioning. Similarly, Global Insight Fund, which includes a conservation of principal component, outpaced its benchmark in a down market by 252 bps. New Perspective Fund, a global growth fund, slightly trailed the benchmark and ranked in the second quartile against peers.
Small cap stocks declined in the quarter, led lower by U.S. companies. SMALLCAP World Fund trailed its benchmark in this environment due to stock selection, in part as a result of a pullback in higher growth U.S. companies.
Equity income and balance funds (Q1 2025)
All our equity income and balance funds beat their primary prospectus benchmarks, doing so by an average of 311 bps. Four of five funds ranked in the top two quartiles against peers.
Our equity income funds did the best in this group. In the U.S., The Income Fund of America beat its primary benchmark by 653 bps and ranked first amongst peers, while Capital Income Builder (CIB), a global fund, ranked 17th and returned an excess of 524 bps more than its benchmark. CIB also ranks in the first quartile against peers on 1-, 3-, 5-, and 10-year timeframes.
American Balanced Fund declined in the quarter but demonstrated downside resilience, returning an excess of 127 bps more than its benchmark.
Longer term perspective
The shakeup of the past quarter has some investors questioning whether we are at the precipice of a longer, broader rotation away from the stocks that have dominated the past decade. Will markets continue to broaden? Or was this quarter a blip and the Mag 7 will regain their footing to lead markets higher again?
We cannot say what the future holds, but the past quarter has given us a lot of clues. If markets do continue to broaden, our diversified, objective-based funds stand to benefit.
It’s also worth noting that our funds have held their own in Mag 7-dominated markets; should markets resume their concentration around large growth companies, we expect our funds to continue to rank well against peers with better downside resiliency than benchmarks. In the decade ended 3/31/25, much of it dominated by large tech growth, 15 of 20 equity funds ranked in the top two quartiles against Morningstar peers. Moreover, in this timeframe, 80% of our available equity mutual funds (16 of 20 funds) produced less downside than their primary benchmark (as measured by down capture ratios), resulting in a smoother ride for many of our investors.
*A correction is defined as a 10% or greater decline in the price return of an index from its recent peak. A bear market is defined as a 20% or greater decline in the price return of an index from its recent peak.
Mutual fund and ETF rankings are based on total return. ETF returns are based on net asset value (NAV) and those are used to determine the rankings.
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1 year
Fund Total Return Percentile Peers Morningstar Category AMCAP Fund 2.5% 77th 911 Large Growth American Balanced Fund 8.3% 11th 612 Moderate Allocation American Funds Developing World Growth and Income Fund 5.7% 52nd 703 Diversified Emerging Markets American Funds Global Balanced Fund 4.9% 52nd 317 Global Allocation American Funds Global Insight Fund 4.6% 64th 282 Global Large-Stock Blend American Funds International Vantage Fund 3.2% 34th 325 Foreign Large Growth American Mutual Fund 10.2% 15th 1046 Large Value CGBL Capital Group Core Balanced ETF 8.5% 10th 612 Moderate Allocation CGCV Capital Group Conservative Equity ETF - - - Large Value CGDG Capital Group Dividend Growers ETF 10.4% 11th 282 Global Large Blend CGDV Capital Group Dividend Value ETF 11.4% 9th 1046 Large Value CGGE Capital Group Global Equity ETF - - - Global Large-Stock Blend CGGO Capital Group Global Growth Equity ETF -0.8% 60th 294 Global Large-Stock Growth CGGR Capital Group Growth ETF 7.4% 26th 911 Large Growth CGIC Capital Group International Core Equity ETF - - - Foreign Large Blend CGIE Capital Group International Equity ETF 2.1% 45th 325 Foreign Large Blend CGNG Capital Group New Geography Equity ETF - - - Diversified Emerging Markets CGUS Capital Group Core Equity ETF 8.3% 19th 1202 Large Blend CGXU Capital Group International Focus Equity ETF -4.5% 83rd 325 Foreign Large Growth Capital Income Builder 12.0% 6th 317 Global Allocation Capital World Growth and Income Fund 5.4% 52nd 282 Global Large-Stock Blend EuroPacific Growth Fund 0.2% 54th 325 Foreign Large Growth Fundamental Investors 7.0% 43rd 1202 Large Blend International Growth and Income Fund 5.1% 68th 611 Foreign Large Blend New Perspective Fund 5.9% 18th 294 Global Large-Stock Growth New World Fund 3.2% 68th 703 Diversified Emerging Markets SMALLCAP World Fund -7.3% 72nd 138 Global Small/Mid Stock The Growth Fund of America 7.0% 29th 911 Large Growth The Income Fund of America 11.5% 1st 256 Moderately Aggressive Allocation The Investment Company of America 10.0% 7th 1202 Large Blend The New Economy Fund 5.2% 22nd 294 Global Large-Stock Growth Washington Mutual Investors Fund 9.6% 9th 1202 Large Blend -
5 years
Fund Total Return Percentile Peers Morningstar Category AMCAP Fund 14.1% 87th 805 Large Growth American Balanced Fund 11.0% 30th 551 Moderate Allocation American Funds Developing World Growth and Income Fund 7.2% 71st 586 Diversified Emerging Markets American Funds Global Balanced Fund 8.3% 68th 293 Global Allocation American Funds Global Insight Fund 12.4% 77th 248 Global Large-Stock Blend American Funds International Vantage Fund 9.6% 43rd 279 Foreign Large Growth American Mutual Fund 14.7% 81st 939 Large Value CGBL Capital Group Core Balanced ETF - - - Moderate Allocation CGCV Capital Group Conservative Equity ETF - - - Large Value CGDG Capital Group Dividend Growers ETF - - - Global Large Blend CGDV Capital Group Dividend Value ETF - - - Large Value CGGE Capital Group Global Equity ETF - - - Global Large-Stock Blend CGGO Capital Group Global Growth Equity ETF - - - Global Large-Stock Growth CGGR Capital Group Growth ETF - - - Large Growth CGIC Capital Group International Core Equity ETF - - - Foreign Large Blend CGIE Capital Group International Equity ETF - - - Foreign Large Blend CGNG Capital Group New Geography Equity ETF - - - Diversified Emerging Markets CGUS Capital Group Core Equity ETF - - - Large Blend CGXU Capital Group International Focus Equity ETF - - - Foreign Large Growth Capital Income Builder 10.8% 25th 293 Global Allocation Capital World Growth and Income Fund 13.9% 60th 248 Global Large-Stock Blend EuroPacific Growth Fund 9.8% 40th 279 Foreign Large Growth Fundamental Investors 17.6% 54th 1047 Large Blend International Growth and Income Fund 11.8% 48th 550 Foreign Large Blend New Perspective Fund 15.5% 11th 242 Global Large-Stock Growth New World Fund 10.7% 26th 586 Diversified Emerging Markets SMALLCAP World Fund 9.6% 64th 116 Global Small/Mid Stock The Growth Fund of America 17.5% 43rd 805 Large Growth The Income Fund of America 11.7% 62nd 221 Moderately Aggressive Allocation The Investment Company of America 18.6% 20th 1047 Large Blend The New Economy Fund 13.9% 34th 242 Global Large-Stock Growth Washington Mutual Investors Fund 17.9% 46th 1047 Large Blend -
10 years
Fund Total Return Percentile Peers Morningstar Category AMCAP Fund 10.1% 91st 636 Large Growth American Balanced Fund 8.3% 9th 444 Moderate Allocation American Funds Developing World Growth and Income Fund 2.6% 77th 397 Diversified Emerging Markets American Funds Global Balanced Fund 5.3% 32nd 223 Global Allocation American Funds Global Insight Fund 8.5% 44th 161 Global Large-Stock Blend American Funds International Vantage Fund 6.2% 27th 169 Foreign Large Growth American Mutual Fund 9.8% 25th 729 Large Value CGBL Capital Group Core Balanced ETF - - - Moderate Allocation CGCV Capital Group Conservative Equity ETF - - - Large Value CGDG Capital Group Dividend Growers ETF - - - Global Large Blend CGDV Capital Group Dividend Value ETF - - - Large Value CGGE Capital Group Global Equity ETF - - - Global Large-Stock Blend CGGO Capital Group Global Growth Equity ETF - - - Global Large-Stock Growth CGGR Capital Group Growth ETF - - - Large Growth CGIC Capital Group International Core Equity ETF - - - Foreign Large Blend CGIE Capital Group International Equity ETF - - - Foreign Large Blend CGNG Capital Group New Geography Equity ETF - - - Diversified Emerging Markets CGUS Capital Group Core Equity ETF - - - Large Blend CGXU Capital Group International Focus Equity ETF - - - Foreign Large Growth Capital Income Builder 6.2% 12th 223 Global Allocation Capital World Growth and Income Fund 8.2% 54th 161 Global Large-Stock Blend EuroPacific Growth Fund 5.2% 52nd 169 Foreign Large Growth Fundamental Investors 11.7% 39th 802 Large Blend International Growth and Income Fund 5.2% 57th 381 Foreign Large Blend New Perspective Fund 10.6% 12th 177 Global Large-Stock Growth New World Fund 6.3% 3rd 397 Diversified Emerging Markets SMALLCAP World Fund 6.7% 34th 75 Global Small/Mid Stock The Growth Fund of America 12.8% 46th 636 Large Growth The Income Fund of America 7.3% 41st 189 Moderately Aggressive Allocation The Investment Company of America 11.6% 40th 802 Large Blend The New Economy Fund 10.4% 17th 177 Global Large-Stock Growth Washington Mutual Investors Fund 11.6% 42nd 802 Large Blend
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Source: Capital Group, based on Morningstar data as of 3/31/25. The Morningstar rankings do not reflect the effects of sales charges, account fees or taxes. When applicable, results reflect fee waivers and/or expense reimbursements, without which they would have been lower. Please see capitalgroup.com for more information. Past results are no guarantee of results in future periods. While American Funds mutual funds class F-2 shares do not include fees for advisor compensation and service provider payments, the share classes represented in the Morningstar category have varying fee structures and can include these and other fees and charges, resulting in higher expenses.
Fund results and analysis
Index comparisons:
The 20 equity-focused American Funds and their primary benchmarks in the results are as follows, unless otherwise indicated: AMCAP Fund®, American Mutual Fund®, Fundamental Investors®, The Growth Fund of America®, The Investment Company of America® and Washington Mutual Investors Fund (S&P 500 Index); American Balanced Fund® (60% S&P 500 Index and 40% Bloomberg U.S. Aggregate Index); American Funds® Global Balanced Fund (60% MSCI All Country World Index and 40% Bloomberg Global Aggregate Index); Capital Income Builder® (70%/30% MSCI All Country World Index/Bloomberg U.S. Aggregate Index); The Income Fund of America® (65%/35% S&P 500 Index/Bloomberg U.S. Aggregate Index); Capital World Growth and Income Fund®, The New Economy Fund®, New Perspective Fund® and New World Fund® (MSCI All Country World Index); American Funds® Developing World Growth and Income Fund (MSCI Emerging Markets Index); EuroPacific Growth Fund® and International Growth and Income Fund (MSCI All Country World ex USA Index); SMALLCAP World Fund® (MSCI All Country World Small Cap Index); American Funds® International Vantage Fund (MSCI EAFE [Europe, Australasia, Far East] Index); American Funds® Global Insight Fund (MSCI World Index).
The 12 Capital Group equity-focused ETFs and their primary benchmarks in the results are as follows: CGDG Capital Group Dividend Growers ETF, CGGO Capital Group Global Growth Equity ETF, CGNG Capital Group New Geography Equity ETF (MSCI All Country World Index); CGIE Capital Group International Equity ETF (MSCI EAFE [Europe, Australasia, Far East] Index); CGUS Capital Group Core Equity ETF, CGGR Capital Group Growth ETF, CGDV Capital Group Dividend Value ETF, CGCV Capital Group Conservative Equity ETF (S&P 500 Index); CGXU Capital Group International Focus Equity ETF, CGIC Capital Group International Core Equity ETF (MSCI All Country World ex USA Index); CGGE Capital Group Global Equity ETF (MSCI World Index); CGBL Capital Group Core Balanced ETF (60%/40% S&P 500 Index/Bloomberg U.S. Aggregate Index).
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60%/40% MSCI All Country World Index/Bloomberg Global Aggregate Index blends the MSCI All Country World Index with the Bloomberg Global Aggregate Index by weighting their cumulative total returns at 60% and 40%, respectively. The blend is rebalanced monthly. MSCI All Country World Index is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market results in the global developed and emerging markets, consisting of more than 40 developed- and emerging-market country indexes. Results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. Bloomberg Global Aggregate Index represents the global investment-grade fixed income markets. The indexes are unmanaged, and results include reinvested distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
60%/40% S&P 500 Index/Bloomberg U.S. Aggregate Index blends the S&P 500 with the Bloomberg U.S. Aggregate Index by weighting their cumulative total returns at 60% and 40%, respectively. The blend is rebalanced monthly. S&P 500 Index is a market- capitalization-weighted index based on the results of approximately 500 widely held common stocks. Bloomberg U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market. The indexes are unmanaged, and results include reinvested distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
65%/35% S&P 500 Index/Bloomberg U.S. Aggregate Index blends the S&P 500 with the Bloomberg U.S. Aggregate Index by weighting their cumulative total returns at 65% and 35%, respectively. The blend is rebalanced monthly. S&P 500 Index is a market-capitalization-weighted index based on the results of approximately 500 widely held common stocks. Bloomberg U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market. The indexes are unmanaged, and results include reinvested distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
70%/30% MSCI All Country World Index/Bloomberg U.S. Aggregate Index blends the MSCI All Country World Index with the Bloomberg U.S. Aggregate Index by weighting their total returns at 70% and 30%, respectively. The blend is rebalanced monthly. MSCI All Country World Index is a free-float-adjusted market-capitalization-weighted index that is designed to measure equity market results in the global developed and emerging markets, consisting of more than 40 developed- and emerging-market country indexes. Results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. Bloomberg U.S. Aggregate Index represents the U.S. investment-grade fixed-rate bond market. The indexes are unmanaged, and results include reinvested distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
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MSCI All Country World ex USA Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market results in the global developed and emerging markets, excluding the United States. The index consists of more than 40 developed and emerging market country indexes. Results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
MSCI All Country World Index (ACWI) is a free float-adjusted market capitalization weighted index that is designed to measure equity market results in the global developed and emerging markets, consisting of more than 40 developed and emerging market country indexes.
MSCI EAFE® (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization weighted index that is designed to measure developed equity market results, excluding the United States and Canada. Results reflect dividends net of withholding taxes. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
MSCI Emerging Markets Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market results in the global emerging markets, consisting of more than 20 emerging market country indexes. Results reflect dividends gross of withholding taxes through December 31, 2000, and dividends net of withholding taxes thereafter. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
MSCI All Country World Small Cap Index is a free float-adjusted market capitalization-weighted index that is designed to measure equity market results of smaller capitalization companies in both developed and emerging markets. Results reflect dividends net of withholding taxes. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure equity market results of developed markets. The index consists of more than 20 developed market country indexes, including the United States. Results reflect dividends net of withholding taxes. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange.
The Russell 1000® Growth Index measures the performance of the large-cap growth segment of the US equity universe. It includes those Russell 1000 companies with relatively higher price-to-book ratios, higher I/B/E/S forecast medium term (2 year) growth and higher sales per share historical growth (5 years). The Russell 1000® Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics. S&P 500 Index is a market capitalization-weighted index based on the average weighted results of approximately 500 widely held common stocks.
The Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell Index.
S&P 500 Dividend Aristocrats Index is a list of companies from the S&P 500 Index that have a track record of raising their dividends for at least 25 consecutive years.
S&P 500® Equal Weight Index is the equal-weight version of the widely-used S&P 500. The index includes the same constituents as the capitalization weighted S&P 500, but each company in the S&P 500 EWI is allocated a fixed weight - or 0.2% of the index total at each quarterly rebalance.
S&P 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. This index is unmanaged, and its results include reinvested dividends and/or distributions but do not reflect the effect of sales charges, commissions, account fees, expenses or U.S. federal income taxes.
Down capture ratio is a statistical measure of an investment manager's overall performance in down-markets.
Magnificent 7 refers to seven companies (Microsoft, Apple, Alphabet, Amazon, NVIDIA, Meta and Tesla) whose stocks came to dominate the S&P 500 Index in 2023.