Having hit new all-time on the 29th January the FT Wilshire 5000 lost momentum month-end as the Fed cools optimism over a March rate cut.
Technology and digital information sectors continue to drive FT Wilshire 5000 returns.
Wide dispersion of returns within US technology sector as semiconductors spike higher.
Technology and digital information posted positive returns in January and have delivered the strongest returns over three months. Transportation and real estate reversed course, underperforming in January.
Technology and digital information remain the largest contributors to returns over one and three months.
Growth has continued to outperform Value. Small cap has marginally outperformed large cap over three months but saw negative returns in January.
Growth sees a 5yr annualized return of 17.9% vs 10.7% for value.
Our “Pure Factors” are designed to eliminate the unintended sector and factor exposures incorporated into most conventional factor methodologies. In this regard they are designed to deliver “pure” factor premia.
Pure Momentum outperforms in January with Size and Quality the laggards.
Pure Value has outperformed Quality over three months. Beta has underperformed.
The global equity rally lost some momentum in January. Japan (in USD terms) has outperformed, China sees further significant declines.
Wide dispersion of returns within Emerging markets with India and Taiwan pulling ahead whilst China significantly underperforms.
In USD terms the US has delivered the strongest returns over 10 years. Europe ex UK has outperformed the UK. China has fallen back dramatically from its high in January 2021.
Larger positive US digital info and tech contributions more than offset the larger relative drag from transportation in January.
Consumer goods continues to act as a drag on China returns.
US (light blue bars) digital info, health care and tech outperformed in January. US transportation significantly underperformed Global ex US peers (dark blue bars).
A further escalation of the conflict in the middle east has fueled supply concerns, driving the oil price higher since the start of the year. Despite the conflict the price of oil is still well below its 2023 high reached on 27 September. After a strong Q4 (+11.2%) gold has eased back, driven in part by the modest rise in real yields since the start of the year.
Both US and non-US REITs were hit by the pick up in bond yields in January with the Wilshire Global ex US index underperforming the US. REITs have still seen strong three month returns. Wilshire Liquid Alternative indexes posted gains in January against a backdrop of increased volatility in equity markets.
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