Investing Ideas
Navigating a sell-off in growth equities
Asset class, sector, and factor diversification may offset volatility for growth stocks.
Key Insights
- The recent equity market sell-off has been sharp, marked by a historic rise in volatility, which has led to the second worst monthly performance for growth stocks versus the broader market in the past 10 years.
- This has come amid elevated growth allocations, based on Fidelity data collected via portfolio construction consultation.
- In past equity sell-offs, relative returns for large cap value stocks, managed futures, and real estate investment trusts, as well as macro and equity-market-neutral strategies, have helped to counter growth stock underperformance.
-
In the 10 worst months for growth equities, stocks in the energy, financials, consumer staples, and industrials sectors have outperformed versus the broader market; meanwhile, dividend yield as a factor has also provided diversification.
- Fidelity has created a list of specific funds that have produced relatively stronger mean returns versus the growth equity index in periods in which growth has underperformed. This list can be shared with advisors.
Get the full white paper
Navigating a sell-off in growth equities
Next steps to consider
Investment & Retirement Products
Meet the unique financial needs of your clients with our diverse investment and retirement offerings.
Learn more
Fidelity Portfolio Quick Check®
Analyze, compare, and optimize your investment strategy in minutes with our free on-demand digital portfolio analysis tool.
Learn more
Asset Allocation Research Team (AART)
Access economic, fundamental, and quantitative analysis from our Asset Allocation Research Team.
Learn more
Diversification does not ensure a profit or guarantee against a loss.
1159448.1.0
6538ED4BC47F430AB52E517F433EC07C