In December, smaller-cap indices in the US outperformed, but for 2020 as a whole larger companies had the upper hand.
US equities continued to generate gains in December, with the S&P 500 index ending the month up by 3.8%. The Dow Jones Industrial Average saw similar gains, returning 3.4%. These returns, however, were beaten by smaller-cap indices in December. Over the month, the S&P MidCap 400 returned 6.5%, while the S&P SmallCap 600 was up 8.3%.
Measured over the course of the whole year, larger companies had the upper hand. The S&P 500 returned more than 18%, beating both the S&P MidCap 400 and the S&P SmallCap 600, which returned 14% and 11%, respectively. However, the Dow Jones index still fell short of mid- and small-cap performance, returning 9.7%.
In terms of US factor indices, the S&P 500 Enhanced Value index saw the best return in December, at 4.4%. However, growth shares were not too far behind, with the S&P 500 Growth index returning 4%. That bought the growth index to a yearly performance of 35%. The enhanced value index ended the year down by around 10%.
When it came to S&P 500 sectors, financials saw the best monthly performance, returning 6.3%. This was followed by information technology, with a gain of 5.7%. Over the course of the year, information technology saw the best performance, returning 44%, followed by consumer discretionary with 33.3%.
In Europe, UK stocks pulled ahead of European stocks in December, with the S&P United Kingdom index returning 3.5% compared to the S&P Europe’s 350’s 2.4%. However, UK equities still underperformed, with the UK down 13% compared to the broad Europe index losing 2.8%.
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Around half the S&P Europe 350 index ended the year with losses. Information Technology finished the year as the clear winner, with returns of more than 30%. Meanwhile, the worst performers were energy and financials, with losses of 33.5% and 15.2%.
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