Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. What's Old is New again. Investors are shifting away from AI leaders, like those that make up the Magnificent Seven,

and falling back in love with laggers, like value and small-capped stocks.

So, how long can this market rotation persist?

Morningstar Index's strategist and the Longview co-host, Dan Lefkowitz, has researched the recent market drama.

Let's check out our conversation.

It's great to see you again, Dan.

Great to be with you, Ivana.

Well, we're talking about the market rotation that started in Q3 is continuing into Q4.

You have been tracking the trends. Tell us what you've seen.

Yeah. So first to sort of set the

scene, you know, if you think about the last 10, closer to 15 years for equity investors,

the action has really been in the U.S. market in that large cap growth, large cap core sort of

space over value stocks, over small cap stocks, over international stocks from the perspective of a U.S.

investor.

And now starting in the third quarter, we really saw a change, as you say, a rotation in market

leadership.

So just looking at the performance of Morning Star Indexes, you know, value beat growth.

We saw small cap beat large.

And we saw our global XUS index beat our Morningstar U.S. market index.

We also saw equal weight U.S. equity index beat the market cap weighted version, which is really interesting.

And key moments in the third quarter ignited that market volatility. For example,

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