Growth and Momentum Dominate in a Diverging Global Landscape

WisdomTree’s Q2 2025 Equity Factor Review, authored by Pierre Debru, dissects how macro policy shifts and earnings dispersion shaped regional equity factor performance and portfolio strategy.

• Growth and Momentum led globally, lifted by AI capex, U.S. mega-cap earnings, and a softer dollar; Value lagged in the U.S. but outperformed in Europe and EM.

• Small-cap revival emerged, especially in Europe and EM, as lower real yields and policy easing boosted cyclicals and exporters.

• Quality underperformed, weighed down by rising duration risk and reduced investor demand for defensive exposures.

What does this factor rotation mean for second-half allocation strategy? Read the full review for regional insights and positioning ideas.