Home Insights Equities Core equities: An attractive option amidst volatility
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Amid ongoing market volatility, core equities are emerging as a compelling—and often overlooked—opportunity. While many investors have gravitated toward passive strategies, the nuanced potential of core equities, which blend characteristics of both growth and value, remains underappreciated. Actively managed core equity strategies can offer not only tactical upside but also important risk mitigation. Historically, they’ve exhibited lower volatility than pure growth or value styles, providing a steadier ride through market cycles. As economic uncertainty persists, revisiting core equities could be key to enhancing portfolio resilience, diversification, and long-term performance.

Core U.S equities deserve a fresh look from investors, especially amid volatile market conditions. With their broad opportunity set, core equities allow portfolio managers to navigate market fluctuations and mitigate risks.

Core equities can dampen swings in performance. Historically, core equities have displayed less volatility than growth and value stocks across market cycles, underpinning their relevance. While market leadership between growth and value has shifted back and forth from the 1980s to the present, core equities demonstrated less volatility. Additionally, sector dispersion between core, growth and value indexes demonstrates how core managers focus on so-called sensitive sectors that are not beholden to either category.

The post-COVID market has been marked by significant volatility in growth, value, and core equities, particularly following the Trump Administration's introduction of aggressive tariffs and the subsequent whipsawing policy announcements over the last four months. This volatility presents opportunities for active managers to take advantage of market fluctuations and valuation discrepancies.

While no investment is immune to downturns, core equities generally provide a more resilient option during economic challenges over the long-term, making them a favored choice for risk-averse investors. Now may be the time to embrace the forgotten core and recognize its potential to enhance investment portfolios in an increasingly complex market landscape.

For a deeper dive into core equities, read Re-evaluating core equities: the forgotten space.

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Investing involves risk, including possible loss of principal. Past Performance does not guarantee future return. All financial investments involve an element of risk. Asset allocation and diversification do not ensure a profit or protect against a loss. Equity investments involve greater risk, including higher volatility, than fixed-income investments. Equity markets are subject to many factors, including economic conditions, government regulations, market sentiment, local and international political events, and environmental and technological issues that may impact return and volatility. The information presented has been derived from sources believed to be accurate; however, we do not independently verify or guarantee its accuracy or validity. Any reference to a specific investment or security does not constitute a recommendation to buy, sell, or hold such investment or security, and does not take account of any investor’s investment objectives or financial situation and should not be construed as specific investment advice, a recommendation, or be relied on in any way as a guarantee, promise, forecast or prediction of future events regarding an investment or the markets in general. The opinions and predictions expressed are subject to change without prior notice.

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