From Morningstar: 2025-04-29 03:49:00

Stocks took a tumble in 2025 following a postelection rally, with a 12% decline and major tech companies shedding more than 20%. However, the Morningstar US Low Volatility Factor Index managed to stay positive, showcasing resilience in volatile markets in past years.

The low-volatility factor focuses on limiting losses and producing superior risk-adjusted returns by selecting less volatile stocks that tend to outperform in down markets. Berkshire Hathaway has played a significant role in the index’s relative success this year, along with Johnson & Johnson and Coca-Cola.

Other factors like value, yield, and size have also outperformed the market in 2025 after lagging in previous years. Quality and momentum factors, which had been strong performers, have underperformed this year, emphasizing the dynamic nature of factor leadership in the market. “No pain, no premium” discusses the performance cyclicality of factors, effective over the long term. Investors can diversify by factor to endure underperformance, as seen in the Morningstar US Multifactor Index with less losses than the broad equity market. Factor investing may see a revival with more-muted returns and trickier conditions. Morningstar Factor Indexes were launched in 2023 with returns backcast to 2008 based on the Morningstar Risk Model. The authors do not own shares in any securities mentioned in the article. 1. The stock market reached record highs today with the Dow Jones Industrial Average closing at 35,000 points, up 1.5% from yesterday’s close. This surge was fueled by strong earnings reports from major tech companies like Apple and Microsoft.

2. President Biden announced a new infrastructure plan that includes $1 trillion in spending over the next eight years. The plan aims to modernize America’s roads, bridges, and public transportation systems while creating millions of jobs in the process.

3. Scientists have discovered a new species of dinosaur in Argentina called Llukalkan aliocranianus. This carnivorous dinosaur had a unique skull structure similar to that of a modern-day crocodile and likely lived during the Late Cretaceous period.

4. The Tokyo Olympics are set to begin on July 23, 2021, after being postponed last year due to the COVID-19 pandemic. Organizers have implemented strict safety protocols to ensure the health and safety of athletes, coaches, and spectators during the games.

5. The United Nations reported that global carbon dioxide emissions have reached record levels, increasing by 2.6% in 2019 compared to the previous year. This rise is attributed to increased use of fossil fuels and deforestation, highlighting the urgent need for countries to take action against climate change.



Read more at Morningstar: How US Market Turmoil Made Low-Volatility Stocks…