• U.S. equities continued to march upward in August, climbing above 20% YTD. The S&P 500^® posted a gain of 3% for the month, as the Fed’s dovish tone, combined with strong earnings reports, buoyed the market. While mega caps led, mid and small caps also posted gains, with the S&P MidCap 400^® and the S&P SmallCap 600^® both up 2%. Volatility declined, as the VIX^® closed at 16.48.
• All factors posted gains. “Risk-on” factors (e.g., Momentum and Growth) led in August, with “risk-off” factors (e.g., Low Volatility and High Yield) lagging.
• All sectors except Energy posted gains, with Financials in the lead, up 5%.

• U.S. equities generally managed to end July in positive territory, with the S&P 500^® posting a gain of 2%, despite concerns about slowing economic growth, the possible impact of the COVID “delta variant”, and rising inflation. Mid-caps posted slight gains, with the S&P MidCap 400® up 0.3%, and small-caps declined, as the S&P SmallCap 600® fell 2%. Volatility rose, with the VIX closing at 18.24.
• Most factors posted gains, with the unlikely combination of Growth and Low Volatility in the lead. High Beta, the leading factor for the first six months of 2021, came last in July.
• Most sectors posted gains, with Health Care in the lead, up 5%.

• U.S. equities ended Q2 with strength, with the S&P 500^® posting a gain of 9%, despite inflation concerns and uncertainty over the future course of the Fed’s stimulus efforts. In a reversal from Q1, mid- and small-caps underperformed, with the S&P MidCap 400^® and S&P SmallCap 600^® up 4% and 5%, respectively. Volatility declined, with the VIX closing at 15.83.
• All factors posted gains, with Momentum in the lead, after its disappointing performance in Q1. In another reversal, Growth outpaced Value.
• All sectors except Utilities posted gains, with Real Estate in the lead, up 13%.

• A major reversal in the U.S. markets occurred in November, thanks to promising developments on COVID-19 vaccines along with a putatively benign outcome of the Presidential and Congressional elections. The S&P 500^® gained 11%, its best performance since April, while smaller caps outperformed, with the S&P MidCap 400^® and the S&P SmallCap 600^® rising 14% and 18%, respectively. Volatility declined, as VIX^® closed the month at 20.57.
• All factor indices gained, as High Beta and Enhanced Value strategies topped the factor league table. Consistent with the reversal theme, Equal Weight outperformed, while Value outperformed Growth.
• Not surprisingly, sector dispersion widened in November, as history shows that sectors tend to be especially important during the Novembers when Presidential elections take place. Energy, up a remarkable 28%, was the month’s top performing sector after years of underperformance.

It’s natural for investors to seek a connection between who wins the White House and which way stocks will go. But a look at history underscores that shareholders are investing in companies, not a political party.

Click HERE to download this interactive exhibit that examines market and economic data for nearly 100 years of US presidential terms.