Breaking News
Investing Pro 0
⏰ React to the Market Faster with Custom, Real-Time News Get Started

High Beta, Small Cap Value Still Lead Equity Factors in 2023

By James PicernoMarket OverviewFeb 07, 2023 07:54AM ET
www.investing.com/analysis/high-beta-small-cap-value-still-lead-equity-factors-in-2023-200635094
High Beta, Small Cap Value Still Lead Equity Factors in 2023
By James Picerno   |  Feb 07, 2023 07:54AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
US500
-0.80%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SPY
-0.72%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IJS
-0.73%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SPHB
-1.59%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MTUM
-0.47%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

The U.S. stock market rally this year continues to be led by so-called high-beta stocks, which are outperforming the broad market by a wide margin, based on a set of proxy ETFs through Monday’s close (Feb. 6).

Invesco S&P 500® High Beta ETF (NYSE:SPHB) is up a sizzling 19.4% so far in 2023. The gain is more than double the broad market’s 7.2% advance, based on SPDR® S&P 500 (NYSE:SPY).

SPHB Daily Chart
SPHB Daily Chart

In second place this year: small-cap value shares. The iShares S&P Small-Cap 600 Value ETF (NYSE:IJS) is up 13.9%, a solid premium over the broad market’s year-to-date gain.

Although most of the major equity factors are posting gains so far in 2023, the downside outlier is momentum. After falling more or less in line with the broad market last year, iShares MSCI USA Momentum Factor ETF (NYSE:MTUM) isn’t participating in this year’s rally and instead is in the red for 2023 with a 3.2% loss.

US Equity Factors - ETF Performance
US Equity Factors - ETF Performance

The weak run for momentum stands out in a year that, so far, has witnessed widening participation in 2023’s rally. “We’re seeing strength in the soldiers, and the generals are now joining the rally as well,” says Ari Wald, head of technical analysis at Oppenheimer in a reference to the broad market and mega-cap tech stocks.

Breadth has improved across the factor ETFs as well. Using a set of moving averages to track the funds listed above shows a sharp recovery in upside momentum recently. The wide-ranging participation suggests that the bullish climate will continue in the near term.

SPY vs US Equity Factor Funds Trending up
SPY vs US Equity Factor Funds Trending up

But by some accounts, this year’s pop will soon run into turbulence. “The recession’s just starting,” advises David Rosenberg, the former chief North American economist at Merrill Lynch. “The market bottoms typically in the sixth or seventh inning of the recession, deep into the Fed easing cycle.” The Fed will soon pause and then pivot with rate hikes, he says, but it’s too early to give the all-clear for stocks at this point, he explains. “There’s nothing right now in my collection of metrics telling me that we’re anywhere close to a bottom,” he tells MarketWatch.com.

High Beta, Small Cap Value Still Lead Equity Factors in 2023
 

Related Articles

High Beta, Small Cap Value Still Lead Equity Factors in 2023

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email