As we concluded in a recent blog post, stimulatory policies by newly elected Presidents lead to rising markets and outperformance over the subsequent half year by Value, Small Cap and High Volatility. This is precisely the behavior we observed as the world awaited the US Presidential Election:

  • US equities adopt a combination recovery + risk-on return profile with a rotation from Growth to Value;
  • Europe adopt a muted factor performance profile amidst a 5% drop in equity valuation;
  • Emerging Markets, the only region to post an overall gain, showed a similar profile to the historic 2020 pattern: Value down and Growth up.

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