Three charts sum up the story of US equity factors in 2025 (Sismo standard factors, US top 1000 stocks):
Cumulative factor returns
Risk and Growth started 2025 strong in January, then plunged in February–March before rebounding sharply in Q2. Value and Yield followed a similar path - both stronger in Q1 and weaker in spring - but Value staged a rebound in August, unlike Yield. Quality showed only modest positive and negative swings through the year and now ranks broadly in line with Value, reflecting a lackluster year for the factor. Momentum remained choppy, with a rally in July, while Sentiment stayed weak throughout.
Monthly factor returns
The bar chart shows the rotations clearly: risk-off in February–March, a powerful re-risking in Q2, and mixed leadership through the summer.
Tech EPS revisions vs Tech returns (US top 1000)
The third chart focuses only on technology stocks. Fed policy and yields were broadly stable in early 2025, yet Growth and Risk collapsed in Feb–Mar. The real drivers were:
The turning point came in May, when revisions flipped positive, fueled by AI adoption and stronger earnings guidance. From there, Growth and Risk surged back to lead year-to-date.
Why this matters for PMs
Factor leadership can flip in weeks. Macro alone doesn’t explain these rotations - fundamentals and revisions often do. Missing those inflection points means missing entire performance cycles.
That’s what Sismo delivers: connecting factors, fundamentals, and macro in real time, so you don’t just see performance - you understand the drivers.
