January continued the momentum observed in December, leading to new all-time highs in equity markets across the world. As a result of this persistence, the factor trend has stayed relatively consistent from December to January, captured by the emphasis on Momentum this month. The largest change observed was the reversal from Volatility to Quality stocks globally.
In thei latest equity market research from Confluence: January 2024 Factor Performance Analysis – Quality, Momentum, and Size equities kick off 2024, Confluence examines how equity market movements impacted factor performance across regions throughout the year, revealing:
- Europe: although Value was down, Yield and dividend growth over five years showed promise and outperformed a negative market by 30bps. Both sales growth stability, monthly momentum over the last year, and forecast growth over 12 months also outperformed.
- UK: Yield outperformed by a notable margin, about 80bps. Within Quality, stocks with a strong net profit margin beat the market by 70bps. Momentum also outperformed.
- US: Growth and Momentum outperformed.
- Emerging Markets: Value, Quality, and Momentum outperformed.
- Canada: Quality and Momentum outperformed.
