Quality = Value

Core Insights - The US equity market has experienced an extended period of narrow leadership from 2023 to 2025, the longest in history, leading to unique valuations and investment opportunities [1] - The number of companies in the S&P 500® Growth Index has significantly decreased from approximately 300 in 2015 to under 140 currently, while nearly 450 companies are now classified as value stocks [1] - High-quality companies are increasingly found within the value index, with about 60% of the value universe now comprised of higher quality stocks, reversing previous trends [1] Investment Opportunities - The historically narrow leadership has resulted in many high-quality US companies being undervalued, allowing investors to acquire superior balance sheets without paying a premium [1] - High-quality stocks in the value universe currently offer a higher dividend yield compared to those in the growth universe, with the yield premium for value-oriented, higher-quality stocks being at its highest in the past decade [1] Portfolio Adjustments - The company has adjusted its portfolios to align with the broadening market, focusing on US quality, dividends, value, and non-US opportunities, reflecting a belief in improving profit fundamentals [1] - The recent broadening of global equity markets suggests a shift in investor sentiment towards recognizing the value of quality stocks that were previously overlooked [1]