Since November 2025, global equities have rotated decisively from long‑favoured growth into value sectors, with materials and energy leading amidst a sharp technology sell-off. Underpinned by expectations for a cyclical growth upswing plus Fed easing, structural themes like onshoring, higher defence and infrastructure spending has further pushed investors to reallocate toward “real-world”, asset-heavy and value, business.
MSCI World Sector performance since 1 November 2025
Since November 2025, global equity markets have demonstrated a clear rotation out of long favored growth areas into value-oriented sectors.
- MSCI World performance has been led by re-rating across Materials (+22.5%) and Energy (+20.2%), whilst Info Tech has declined over 8%.
- The improving equity breadth can be attributed, in part, to an improving growth outlook and expectations of accommodative Fed policy, plus discernment around spending outlooks for mega-cap technology stocks.
- Long-term, structural drivers such as onshoring, higher defense and infrastructure budgets create multi‑year demand trends for real‑economy sectors. Whilst recent concerns over AI disruption, have catalyzed reallocation away from capital light, intangible-heavy growth businesses towards robust, balance-sheet-strong value.
- Expanding market breadth should continue as earnings growth proliferates across sectors, non-technology capex grows and macro uncertainty eases.
- We see opportunities in Financials, Industrials and Materials, supported by improving business survey and production activity indicators, whilst valuation spreads remain wide.
- We also remain constructive on emerging markets, where earnings growth expectations are robust and we see scope for cyclical catch-up and a broader rerating.
Past performance does not predict future returns.
NTM: Next Twelve Months. Source: MacroBond, Bloomberg. Data as of February 12, 2026.
