BIG NUMBER | 11.7%: The Lag 7

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%.

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.

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* Year-to date returns through March 14, 2025

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.

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