Stocks rallied for the holiday-shortened week ended November 27, 2020. Particularly in the US, investors had a number of positive things to react to. Early in the week, despite continued increases in Covid cases, drug companies delivered more good news on the vaccine front. It was also encouraging to buyers to see that Trump at least began the process of conceding the election and beginning the transition process for President-elect Biden. Finally, on Friday it was announced that Thanksgiving Day online sales hit a record, indicating that the consumer remains quite healthy. Bonds didn't have much of a reaction to any of it as, according to MarketWatch, the US 10-year treasury yield rose modestly to 0.858%.
Geographically, all regions did well, but the US held on for first place, followed closely by Non-US Developed. In the US, the Dow Jones Industrial Average crossed over 30,000 for the first time. While this is usually our least-watched index, it was an indication that downtrodden stocks continued to rebound. From a factor perspective, this led to Value outperforming the market for the third consecutive week. The long-term results continue to demonstrate factor efficacy, as shown in the table to the right. As can be seen, for the 15-year period, 3 out of 5 factors win although Size is close for a fourth.
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Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable or equal the corresponding indicated performance level(s). Moreover, you should not assume that any of the above content serves as the receipt of, or as a substitute for, personalized investment advice from Metric Financial.
USA is the MSCI USA index, Non-US Developed is the MSCI EAFE index, Emerging Markets is the MSCI Emerging Markets index, and All Country World is the MSCI ACWI index. One cannot invest in an index. Because the factor indexes have varying inception dates, some of the returns provided are back-tested and do not represent actual performance. Inception dates are as follows:
Momentum = MSCI ACWI Momentum NR USD Index (Inception: 11/30/95)
Value = MSCI ACWI Enhanced Value NR USD Index (Inception: 5/29/15)
Quality = MSCI ACWI Quality NR USD Index (Inception: 5/29/92)
Low Volatility = MSCI ACWI Minimum Volatility (USD) NR USD Index (Inception: 5/28/93)
Size = MSCI ACWI Risk Weighted NR USD Index (Inception: 4/6/11)
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Returns for global market and factor indexes. As of 11/27/20. Source: Morningstar.