The US stock market has experienced a remarkable upswing, with the S&P 500 Index reaching new heights for the third consecutive quarter. However, this growth has been largely driven by a small group of mega-cap technology companies, resulting in a significant disparity between the market-cap weighted S&P 500 Index and its equal-weighted counterpart. Additionally, growth stocks have significantly outperformed their value counterparts.
The Federal Reserve has revised its interest rate projections, predicting only one 25-basis-point rate cut in 2024, down from three cuts forecasted in March. Despite this, a majority of economists expect two rate cuts this year.
In terms of sector performance, the Russell MidCap Value Index returned -3.40% for the quarter, with eight out of 11 sectors experiencing declines. Consumer staples, healthcare, and materials were the worst-performing sectors, while utilities, information technology, and real estate led the pack.
The top holdings in the Russell MidCap Value Index include M&T Bank Corp., Kemper Corp., and U.S. Foods Holding Corp., among others. These holdings account for approximately 18.20% of the portfolio.
It’s essential to note that past performance is not a guarantee of future results, and investors should be aware of the potential risks associated with mid-cap securities, including increased volatility and potential losses. Furthermore, different investment styles may fall in and out of favor, leading to underperformance in certain market conditions.
Investors should carefully consider a fund’s investment objectives, risks, charges, and expenses before making a decision. It’s crucial to read the full prospectus and summary prospectus to understand the potential risks and benefits associated with a particular fund.
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