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  1. ETF Strategist Channel
  2. BIG NUMBER | 11.7%: The Lag 7
ETF Strategist Channel
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BIG NUMBER | 11.7%: The Lag 7

Horizon Investments   Mar 19, 2025
2025-03-19

By Mike Dickson, Ph.D.

The shift in market leadership continues

The uncertainty weighing on stock prices lately has hit many of the market’s highest fliers the hardest—while some previously unloved sectors are perking up.

Case in point: The Magnificent (Mag) 7 tech stocks have collectively plummeted 13% so far this year* (see the chart). That’s a far cry from the Mag 7’s 15% gain to start 2024.

The good news: Value stocks, dividend-paying equities, and defensive sectors (health care and consumer staples) that previously lagged tech stocks are now positive or holding up well amid market volatility. Of note, the equal-weight version of the S&P 500 (though down slightly for the year) is outperforming the Mag 7 by 11.7%.

2024 and 2025 S&P 500 Returns

2024 and 2025 S&P 500 Returns

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However, changes in market leadership extend beyond domestic companies. International stocks, which have led the pack for much of 2025, continue to surge relative to the U.S. market. For example:

  • The MSCI European Economic and Monetary Union (EMU) index is outpacing the S&P 500 by 19.9 percentage points year to date.
  • Chinese large-caps, represented by the FTSE China 50 Index, are outperforming the S&P 500 by a significant 25.4 percentage points.

Gaining exposure to these markets, sectors, and stocks can provide diversification, helping to create a potentially smoother ride during periods of market volatility—when investors want stability the most.

Originally published by Horizon Investments.

For more news, information, and analysis, visit the ETF Strategist Channel.

* Year-to date returns through March 14, 2025

Disclosure Information

The FTSE China 50 Index is a real-time tradable index comprising 50 of the largest and most liquid Chinese stocks. The MSCI EMU Index (European Economic and Monetary Union) captures large and mid cap representation across the Developed Markets countries in the EMU. The Standard and Poor’s 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United StatesReference to an index does not imply that any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. Indices are unmanaged and do not have fees or expense charges, both of which would lower returns. It is not possible to invest directly in an index. Information obtained from third party sources is believed reliable but has not been vetted by the firm or its personnel.

This commentary is written by Horizon Investments’ asset management team. Past performance is not indicative of future results. Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry, or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice, or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. All investing involves the risk of loss.

The investments recommended by Horizon Investments are not guaranteed. There can be economic times when all investments are unfavorable and depreciate in value. Clients may lose money. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The opinions expressed herein are our opinions as of the date of this document. These opinions may not be reflected in all of our strategies. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent. Forward-looking statements cannot be guaranteed. Other disclosure information is available at www.horizoninvestments.com.

Horizon Investments and the Horizon H are registered trademarks of Horizon Investments, LLC

©2025 Horizon Investments, LLC.

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