Updates with YTD style factor returns

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MOMENTUM IS THE LEADER, BUT GROWTH HOT ON ITS HEELS

2025 has been a roller-coaster ride for the S&P 500 index .SPX. The benchmark index has moved from record highs in mid-February, to nearly bear-market lows in early April, to fresh record highs. In fact, on Tuesday, the SPX scored its 36th record closing high of the year.

Given renewed risk-taking, it's perhaps no surprise that when it comes to major style factors that have historically driven portfolio returns, momentum and growth have galloped to the front of the pack.

Major investing style factors include stocks discounted to their fundamentals (value), financially sound companies (quality), size (small caps), stable, lower-risk stocks (low volatility), and stocks exhibiting upward price trends (momentum).

To this, let's add in as separate factors mid- and large-caps, high-growth companies (growth), and those stocks that provide income (dividends).

The S&P 500 index .SPX rallied 4.5% into its February 19 then-record close. It then collapsed 19% into its April 8 closing low before surging more than 38% into Tuesday's record finish. The benchmark index is now up 17.2% in 2025.

Meanwhile, the SPDR S&P 500 ETF Trust SPY.P is up around 17.3% year-to-date (YTD).

Here is a graphic showing the YTD factor ETF percentage changes as well as how they have performed vs the SPY (factor/SPY ratio change).

Momentum MTUM.K is out front with a 24.7% advance so far this year. That said, its quarter-to-date (QTD) Rate of Change (ROC) is just +0.61% (vs +3.2% for the SPY).

Hot on Momentum's heels is Growth SPYG.P with a 24.4% YTD advance. Growth has made a move recently as it shows a QTD ROC of +4.7%, which is the highest of any factor.

Of note, both Momentum and Growth had heavy Tech .SPLRCT exposure (49% for Momentum and 62% for Growth) as of the end of September.

Large caps SCHX.K are up 17.3% YTD, which is flat with the SPY.

After a strong summer run, Small Caps IWM.P are next in line with an 11.7% YTD gain, though they are still underperforming the SPY.

Quality QUAL.K (+11.4% YTD), Value SPYV.P (+9.7%), Mid Caps IJH.P (+4.7%), Dividends NOBL.K (+1.4%), and Low Volatility SPLV.P (+0.5%) are all positive this year, but are also underperforming the SPY.

Of note, Mid Caps, Dividends, and Low Volatility all have a negative ROC QTD.

In any event, as the 2025 race continues to unfold, and the market approaches the final stretch, traders will be keeping a close eye on all these factors as they continue to jockey for position throughout the rest of the year.

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

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AI CAPEX BOOM: CITI SEES INFLECTION POINT CLICK HERE

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STOXX DIPS CLICK HERE

BEFORE THE BELL: FUTURES FLAT, MIXED TECH, HEAVY EARNINGS DAY CLICK HERE

'AMAZING' TRUMP-XI MEETING COOLS TENSIONS CLICK HERE

(Terence Gabriel is a Reuters market analyst. The views expressed are his own)