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WisdomTree Insights
The equity rally which began towards the end of the Q1 last year continued in earnest over the course of Q2 2021 undeterred by the more hawkish Federal Reserve (Fed) policy outlook. That being said, we did observe an apparent pivot evident from the mid-cycle factor rotation triggered last quarter. Small-caps and value equities which were dominating performance since November 2020, began to lose some momentum. High-quality stocks that investors had abandoned despite their strong showing in 2020, were back in vogue.
Is tech resilience expected to continue or will value take the lead? How can thematic exposures be balanced with factors? This could be a promising year for equity investors but a coherent framework is needed to put the different pieces together. This blog synthesizes the various elements into what can be an effective equity strategy for the year ahead.