Equity Market Commentary Q4
Market concentration drives returns but increases risk
David Polak
Equity investment director
Mike Pollgreen
Investment product manager
Key takeaways for the quarter ended December 31, 2024
- Investors should consider remaining balanced with geographic diversity, exposure to dividend payers and growth that isn’t too concentrated.
- Global equity markets were mostly negative in Q4, with the largest U.S.-based companies being the standout exception.
- In addition to the concentration of large U.S. tech companies dominating the global benchmarks, certain idiosyncratic factors held back some of our funds’ results in the short term.
Stock returns were mixed globally in Q4. Equities in the U.S. continued a five-quarter win streak, ending 2024 up 2.4% on the quarter and up a robust 25% on the year, as measured by the S&P 500. However, international markets were decidedly negative during the quarter, seeing their first drop after a recent run of positive returns. The MSCI All Country World Index (ACWI) and MSCI ACWI ex USA Index were down, 1% and 7.6%, respectively. Emerging markets, as proxied by the MSCI EM index, declined 8%. All three were up on the year.
The difference during the quarter between U.S. and non-U.S. stocks was meaningful and only before seen several times since 2000
Sources: Capital Group, Morningstar. As of 12/31/24. Past results are not predictive of results in future periods.
This divergence came amid the backdrop of U.S. elections which saw former President Donald Trump reelected and Republicans taking control of both chambers of Congress.
Despite the amount of attention the election received, it was seemingly overshadowed, as far as markets were concerned, by what has been the largest signal of late, the actions of the Federal Reserve.
In December, the Fed issued its third and final cut to interest rates, as expected. However, that 25 basis point cut, which brought a target range of 4.25% to 4.5%, was itself overshadowed by a hawkish tone from the central bank. Uncertainty around inflation seemed to point to fewer rate cuts than previously expected in 2025 and a rate regime of “higher for longer.”
Despite the lowest rates since December 2022, the U.S. market, as measured by the S&P 500, continued the bumpy ride it charted throughout 2024, ending up in the black on the year and quarter despite several sizable selloffs throughout the year.
Digging deeper into index returns, only four sectors were positive on the quarter in the S&P 500. Consumer discretionary led the way up a robust 14.3%, with communication services, financials and information technology also gainers. The same four sectors were the lone positives in the MSCI ACWI, albeit up less in all four cases.
Zooming out, 10 of 11 sectors were up on the year in the S&P 500, with the outlier being materials, which was down less than half a percentage point. Materials was similarly the only laggard on the year in the MSCI ACWI but down a far more notable 8.1%.
In international stocks, the MSCI ACWI ex USA was down across the board in the fourth quarter with all 11 sectors in the red and materials, consumer staples, health care, utilities and real estate all down double digits. On the year, financials, information technology and communication services were leaders, all up double digits, with industrials and consumer discretionary also positive.
While the U.S. market continued its run of positive quarters, it is worth noting that the S&P 500 Equal Weight Index was down 1.9% in the fourth quarter. The larger companies contributing a greater share of the index’s returns, of course, goes hand-in-hand with the market concentration phenomenon we have witnessed the past few years.
To see this trend in action, look at the Magnificent 7. Without those major contributors, 2024 index returns would have been 15.8% rather than 25% in the S&P 500 and 11.2% rather than 17.5% in MSCI ACWI.
Despite a period of market broadening in mid-2024, growth stocks in the U.S. once again significantly outpaced value stocks during the quarter, as represented by the Russell 1000 Growth Index and Russell 1000 Value Index, 7.1% vs. -2.0% respectively (and 33.4% vs. 14.3%, respectively, for the full 2024 year). Outside the U.S., however, there was little divergence between growth and value, as represented by the MSCI ACWI ex USA Growth and MSCI ACWI ex USA Value indices, as both quarterly and annual returns were within 100 basis points of one another.
As we enter 2025, the market is left guessing which sectors and companies will do well under a second Trump administration. U.S. equities in particular are seeing stretched valuations in many places, and as investors, it’s fair to say that we’re approaching markets conservatively in many of our equity-focused funds.
There are still many reasons to be optimistic about the long-term investment outlook — from artificial intelligence to health care innovations and more — but we will remain vigilant, carefully underwriting the earnings fundamentals that we expect to drive returns in this next chapter of equity markets.
Capital Group equity-focused funds update
American Funds mutual funds results based on F-2 share class, ETFs based on market price
During the fourth quarter, absolute returns of our funds ranged from -8.8% for CGIE Capital Group International Equity ETF to 7.0% for CGGR Capital Group Growth ETF. In line with our market observations above, our U.S.-oriented equity-focused funds — and our growth-oriented portfolios in particular — produced the strongest returns among our funds.*
We faced headwinds during the quarter against our primary indexes, and approximately two-thirds of our equity-focused funds (22 of 32) trailed their benchmark. Relative to our Morningstar peer groups, 47% of our equity-focused funds (15 of 32) were in the first or second quartiles.
U.S.-focused funds (Q4 2024)
As noted above, the broadening market of Q3 2024 gave way to a narrower one in Q4, whereby the largest companies in the U.S. — chiefly the Magnificent 7 — contributed a lion’s share of returns to the S&P 500. We approach portfolio construction from a bottom-up lens, often ending up less concentrated in any one part of the market, and this broadly held back our results during the quarter.
CGDV Capital Group Dividend Value ETF, a growth and income ETF, serves as a good anecdote. Its primary benchmark, the S&P 500, now holds 33.5% in the Magnificent 7 stocks. CGDV seeks to provide a yield greater than the index and uses a quality dividend-focused approach to finding new investments. Not holding some of the stocks that were up on the back of AI exuberance, therefore, led in part to it trailing the S&P 500 more than the rest of our U.S. equity-focused funds during the quarter (by 5.2%). Nonetheless, its excess returns since launch in February 2022 remain strong.
Conversely, CGGR, a broad U.S.-focused capital appreciation ETF, outpaced the S&P 500 by 4.6% in part by holding more of some of the Mag 7 than the index, also diversifying its investments into other “non-Mag 7” technology leaders.
U.S.-focused funds (Full year 2024)
Staying with the U.S. for a moment but focusing on the full 2024 year, our equity-focused funds returns were relatively strong against their comparable Morningstar peer groups. Seven of 11 (64%) ended in the first or second quartile, with CGDV, American Balanced Fund®, and The Investment Company of America® being first quartile. Conversely, AMCAP Fund® was the only fund to end the year in the bottom quartile amongst its respective peer group, due in large part to lighter holdings of NVIDIA.
International and global funds (Q4 2024)
Outside the U.S. and in our global mandates where indexes broadly declined, most of our equity-focused funds (11 of 19) trailed their primary benchmarks during the quarter, though The New Economy Fund® (NEF), American Funds® Developing World Growth and Income Fund (DWGI), CGIC Capital Group International Core Equity ETF, EuroPacific Growth Fund®, International Growth and Income Fund and New Perspective Fund® held up better.
In addition to the concentration of large U.S. tech still dominating the global benchmarks, certain idiosyncratic factors held back some of our results here in the short term.
An example can be found with American Funds® Global Insight Fund, which trailed its benchmark — the MSCI World Index — by 3.1% during the quarter and 8.3% during the 2024 year. The fund seeks to provide prudent growth of capital and conservation of principal over a full market cycle, and historically generated greater excess returns in down and “normal” markets.† Somewhat recently, it held up better than the index during the COVID-19 market decline of 2020 and the interest rate hike market correction of 2022.‡ While we remain confident in the fund’s current positioning to accomplish its objectives, holding less of the Magnificent 7 stocks and less U.S.-based companies weighed on returns in 2024.
The quarterly returns of our international and global equity-focused funds were, on balance, in line with our peers — 52% (10 of 19) of the funds ended the quarter in the first and second quartile of Morningstar peer groups, while just 10% (2 of 19) were in the bottom quartile.
International and global funds (Full year 2024)
During the full year, a majority of our international and global equity-focused funds trailed their benchmarks, though just over 30% (5 of 16) ended in the first or second quartile of respective peer groups. We should note that while New World Fund® was the fund to trail its primary benchmark (MSCI ACWI) by the most during the year, its return was only slightly behind (by 0.7%) the MSCI EM index. This fund seeks broad exposure to emerging markets opportunities, principally by investing in emerging markets companies as well as multinational companies with material emerging markets exposure.
One fund worth noting has been NEF, which sits in Morningstar’s Global Large Stock Growth category. Seeking capital appreciation through innovative companies, it generated a 24.0% return in 2024, landing it in the top quartile of peers. Capital Income Builder®, a multi-asset fund that seeks to provide a growing stream of income and current income from global markets, also finished the year in the top quartile and now also sits in the top quartile over 3-, 5-, and 10-year periods.
Longer term perspective
It’s always prudent in our view to examine results over longer timeframes — timeframes that correspond with many of our investors’ time horizons.
Over the past decade, we’ve been pleased with the contour of our equity-focused mutual funds’ downside resilience. Through 12/31/24, 88% of our available mutual funds produced less downside than their primary index as measured by down capture ratios.§ That’s the type of statistic that isn’t felt when markets are on a tear, but one which we believe contributes to creating and preserving wealth through time.
*All internationally focused funds declined during the quarter whereas 9 of 13 U.S.-oriented equity-focused funds advanced.
†Down markets and “normal” markets defined by environments where the monthly rolling 1-yr return of MSCI World was negative and 0% to 15%, respectively.
‡COVID-19 decline and interest rate hike market correction periods defined as 2/1/20 to 3/31/20 and 1/1/22 to 12/31/22.
§As measured by down capture ratio against primary prospectus benchmark being less than 100% for all our equity-focused mutual funds with at least a 10-year track record.
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 21.4% 82nd 1088 Large Growth American Balanced Fund 15.2% 14th 727 Moderate Allocation American Funds Developing World Growth and Income Fund 3.9% 73rd 787 Diversified Emerging Markets American Funds Global Balanced Fund 6.8% 56th 351 Global Allocation American Funds Global Insight Fund 10.3% 73rd 335 Global Large-Stock Blend American Funds International Vantage Fund 1.3% 73rd 384 Foreign Large Growth American Mutual Fund 15.2% 42nd 1170 Large Value CGCV Capital Group Conservative Equity ETF - - - Large Value CGUS Capital Group Core Equity ETF 24.8% 27th 1386 Large Blend CGDV Capital Group Dividend Value ETF 20.1% 8th 1170 Large Value CGGE Capital Group Global Equity ETF - - - Global Large-Stock Blend CGGO Capital Group Global Growth Equity ETF 14.9% 52nd 342 Global Large-Stock Growth CGGR Capital Group Growth ETF 32.0% 37th 1088 Large Growth CGIC Capital Group International Core Equity ETF - - - Foreign Large Blend CGIE Capital Group International Equity ETF 1.1% 75th 384 Foreign Large Blend CGXU Capital Group International Focus Equity ETF 4.8% 52nd 384 Foreign Large Growth CGNG Capital Group New Geography Equity ETF - - - Diversified Emerging Markets Capital Income Builder 10.5% 21st 351 Global Allocation Capital World Growth and Income Fund 14.2% 51st 335 Global Large-Stock Blend EuroPacific Growth Fund 4.9% 50th 384 Foreign Large Growth Fundamental Investors 23.3% 47th 1386 Large Blend International Growth and Income Fund 3.6% 66th 699 Foreign Large Blend New Perspective Fund 17.0% 39th 342 Global Large-Stock Growth New World Fund 6.8% 46th 787 Diversified Emerging Markets SMALLCAP World Fund 2.6% 53rd 166 Global Small/Mid Stock The Growth Fund of America 28.7% 54th 1088 Large Growth The Income Fund of America 11.1% 74th 300 Moderately Aggressive Allocation The Investment Company of America 25.2% 20th 1386 Large Blend The New Economy Fund 23.9% 17th 342 Global Large-Stock Growth Washington Mutual Investors Fund 19.2% 70th 1386 Large Blend -
5 years
Fund Total Return Percentile Peers Morningstar Category AMCAP Fund 11.4% 89th 952 Large Growth American Balanced Fund 8.4% 17th 641 Moderate Allocation American Funds Developing World Growth and Income Fund 0.1% 79th 632 Diversified Emerging Markets American Funds Global Balanced Fund 4.8% 44th 319 Global Allocation American Funds Global Insight Fund 7.9% 64th 301 Global Large-Stock Blend American Funds International Vantage Fund 4.4% 46th 334 Foreign Large Growth American Mutual Fund 9.7% 43rd 1036 Large Value CGCV Capital Group Conservative Equity ETF - - - Large Value CGUS Capital Group Core Equity ETF - - - 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 CGXU Capital Group International Focus Equity ETF - - - Foreign Large Growth CGNG Capital Group New Geography Equity ETF - - - Diversified Emerging Markets Capital Income Builder 6.0% 19th 319 Global Allocation Capital World Growth and Income Fund 8.8% 49th 301 Global Large-Stock Blend EuroPacific Growth Fund 3.8% 55th 334 Foreign Large Growth Fundamental Investors 12.9% 58th 1180 Large Blend International Growth and Income Fund 3.8% 72nd 618 Foreign Large Blend New Perspective Fund 11.4% 26th 278 Global Large-Stock Growth New World Fund 5.0% 17th 632 Diversified Emerging Markets SMALLCAP World Fund 5.5% 48th 133 Global Small/Mid Stock The Growth Fund of America 15.2% 55th 952 Large Growth The Income Fund of America 6.8% 73rd 268 Moderately Aggressive Allocation The Investment Company of America 14.4% 24th 1180 Large Blend The New Economy Fund 11.2% 29th 278 Global Large-Stock Growth Washington Mutual Investors Fund 12.3% 66th 1180 Large Blend -
10 years
Fund Total Return Percentile Peers Morningstar Category AMCAP Fund 11.2% 90th 748 Large Growth American Balanced Fund 8.4% 10th 489 Moderate Allocation American Funds Developing World Growth and Income Fund 2.1% 83rd 430 Diversified Emerging Markets American Funds Global Balanced Fund 5.1% 32nd 244 Global Allocation American Funds Global Insight Fund 8.8% 44th 198 Global Large-Stock Blend American Funds International Vantage Fund 6.1% 41st 210 Foreign Large Growth American Mutual Fund 9.6% 25th 808 Large Value CGCV Capital Group Conservative Equity ETF - - - Large Value CGUS Capital Group Core Equity ETF - - - 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 CGXU Capital Group International Focus Equity ETF - - - Foreign Large Growth CGNG Capital Group New Geography Equity ETF - - - Diversified Emerging Markets Capital Income Builder 5.8% 18th 244 Global Allocation Capital World Growth and Income Fund 8.5% 51st 198 Global Large-Stock Blend EuroPacific Growth Fund 5.6% 53rd 210 Foreign Large Growth Fundamental Investors 12.2% 41st 889 Large Blend International Growth and Income Fund 4.6% 70th 421 Foreign Large Blend New Perspective Fund 11.3% 20th 196 Global Large-Stock Growth New World Fund 6.5% 1st 430 Diversified Emerging Markets SMALLCAP World Fund 8.0% 23rd 84 Global Small/Mid Stock The Growth Fund of America 13.9% 55th 748 Large Growth The Income Fund of America 6.9% 66th 221 Moderately Aggressive Allocation The Investment Company of America 12.0% 47th 889 Large Blend The New Economy Fund 11.5% 16th 196 Global Large-Stock Growth Washington Mutual Investors Fund 11.6% 57th 889 Large Blend
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Source: Capital Group, based on Morningstar data as of 12/31/24. 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 10 Capital Group equity-focused ETFs and their primary benchmarks in the results are as follows: CGGO Capital Group 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).
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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.
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.
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 1000® Value Index measures the performance of the large-cap value segment of the US equity universe. It includes those Russell 1000 companies with relatively lower price-to-book ratios, lower I/B/E/S forecast medium term (2 year) growth and lower sales per share historical growth (5 years). The Russell 1000® Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics.
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.
The 10-year Treasury is a type of Treasury securities that are debt obligations (otherwise known as bills, notes and bonds) issued by the U.S. Department of the Treasury with the full faith and credit of the federal government. The 10-year Treasury note pays interest every six months and can be held until maturity (10 years) or sold on the secondary market before it matures. The price and yield of the 10-year Treasury reflects market opinions about the health and expectations of the U.S. economy over the next decade.
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.