U.S. Large-Cap Growth Continues to Lead

December 2, 2014

globalmarketsdec2014U.S. markets notched another month of gains in November extending the rebound off the October correction lows. U.S. large-cap stocks are on track to return above-average gains this year, but not all markets boast such a strong showing.

U.S. small caps barely gained in November and are up less than 2% this year-to-date. Developed foreign markets gained half as much as U.S. large caps (1.36% vs. 2.69%) and remain down almost 2% in 2014. Emerging markets lost 1.5% in November and are flat this year-to-date.

The same trends we’ve been seeing all year continued in November: U.S. markets did better than most foreign markets; large-caps led small; and growth beat value. Eventually market leadership will change – U.S. large-cap growth won’t lead forever – but we’re sticking with this trend as long as it continues.

What’s Working

Large-cap growth funds continued to lead in November, and these funds are highly ranked this month. Mid-cap growth also had a strong month, and a few midcap
funds rose up the ranks.

The leading diversified funds are primarily large-cap U.S. growth funds and ETFs, along with a few mid-cap growth funds. Technology-focused large-cap funds, like funds that track the NASDAQ 100 index, have done particularly well. Top sectors include transportation, which had a great month, as well as biotech, health care and semi-conductors.

 Fixed Income

Interest rates continued their retreat despite continued growth and indications that the Fed is on track to start raising rates in 2015. Short-term rates, however, have risen modestly, so perhaps the market is simply anticipating that next year’s rate increases will keep inflation in check.

Long-term bond holders saw gains of more than 2% in November, while intermediate-term bond holders gained about 0.4%. High yields had a harder time, down about 0.5%, and global and emerging market bonds also suffered, down 0.7% and 0.9% respectively.


Print Friendly, PDF & Email

Previous post:

Next post: