Towards the end of 2025, there were widely noted rotational undercurrents affecting sentiment and positioning among equity markets participants. By the 30th trading day of 2026, we called out a meaningful shift in U.S. equity leadership as early-year performance had rotated toward cash-flow-sensitive value stocks, marking Value’s strongest relative start versus Growth since 1991.
Source: Bloomberg as of 3/19/2026. Past performance is no guarantee of future results. An index is unmanaged and unavailable for direct investment.
That pattern has largely held amidst the geopolitical shock following recent U.S. military actions in Iran, as relative leadership has remained tilted toward value-oriented and higher-yielding equities. While there has been some giveback in absolute returns, the underlying structure of leadership has been more stable than might be expected in a purely event-driven environment.
Dividend performance is consistent with this broader shift. Higher-yielding equities have outperformed the broader market year-to-date, particularly in the U.S., where the distinction between income-oriented and growth-oriented companies is more pronounced. Given the overlap between value and dividend-paying stocks, this is likely a parallel expression of the same underlying rotation.
Importantly, this dynamic does not necessarily imply a uniformly weak market environment. Rather, it suggests a shift away from duration-sensitive growth leadership toward companies with more immediate cash flow visibility. That transition appears to have been underway entering 2026 and has, to this point, persisted through external shocks.
Source: Bloomberg as of 3/19/26. Performance presented in USD. Past performance is no guarantee of future results. An index is unmanaged and unavailable for direct investment. The U.S. market index is the S&P 500® and the dividend index is the Bloomberg Dividend 500. The international market index is the MSCI AC World Index ex USA and the dividend index is the MSCI World High Dividend Yield Index. .
Past performance does not guarantee future results. Investing in securities involves risk, including the possibility of the loss of principal.
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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® 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® Index measures the performance of the large-cap segment of the US equity universe. The Russell 1000 Index is a subset of the Russell 3000® Index which is designed to represent approximately 98% of the investable US equity market.
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