The Takeaway
Growth staged a strong comeback, outperforming value across all regions and segments. The Morningstar US Large Broad Growth TR USD Index led the way with a return of 21.8% and the highest relative outperformance over its value counterpart.
The quarter also experienced higher volatility as compared to Q1 across all segments. The volatility differential between growth and value stocks was highest for the US large growth segment.
Valuation spreads between growth and value stocks, measured by the P/E ratio (trailing 12 months) increased over the past quarter across all segments. The most significant increase was observed in the US large growth segment.
Global equity markets began Q2 2025 on a weak footing amid a sharp selloff triggered by President Donald Trump’s announcement of sweeping global tariffs. However, sentiment reversed as markets rebounded strongly through the remainder of the quarter. In the US, mega-cap technology stocks—particularly NVIDIA, Microsoft, Broadcom, and Meta—led the rally. Developed markets outside the US saw robust gains, driven by strength in financials and industrials, with Japan, the UK, and Germany serving as key contributors. In emerging markets, Taiwan Semiconductor Manufacturing Co. alone delivered nearly 22% of the region’s returns, while Taiwan, South Korea, and India together accounted for more than 75% of the overall index returns.
©2025 Morningstar. All Rights Reserved. The information, data, analyses and opinions contained herein (1) include the proprietary information of Morningstar, (2) may not be copied or redistributed, (3) do not constitute investment advice offered by Morningstar, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete or accurate. Morningstar has not given its consent to be deemed an "expert" under the federal Securities Act of 1933. Except as otherwise required by law, Morningstar is not responsible for any trading decisions, damages or other losses resulting from, or related to, this information, data, analyses or opinions or their use. References to specific securities or other investment options should not be considered an offer (as defined by the Securities and Exchange Act) to purchase or sell that specific investment. Past performance does not guarantee future results. Before making any investment decision, consider if the investment is suitable for you by referencing your own financial position, investment objectives, and risk profile. Always consult with your financial advisor before investing.
Indexes are unmanaged and not available for direct investment.
Morningstar indexes are created and maintained by Morningstar, Inc. Morningstar® is a registered trademark of Morningstar, Inc.