Stocks continue their winning ways against difficult backdrop.
Stocks continued their winning ways in 2005 against the difficult backdrop of rising interest rates, surging commodity prices, and catastrophic natural disasters. The Morningstar US Market Index posted a gain of 6.52% for the year, its third straight year of positive gains.
In our special year-end review, Morningstar fund analyst John Courmarianos provides insights into the market's performance.
To recap some of the key trends:
- Value stocks continue to lead the pack. Value stocks beat their growth and core peers by a narrow margin.
- Mid-caps outperformed large and small caps. Mid-cap stocks, which have led the market for much of last year, continued their winning steak.
- Energy stocks were tough to beat. Fueled by rising oil prices, the energy sector posted a stellar 35% gain.
- Active fund managers edged benchmarks. In five of the nine Morningstar style categories, mutual fund managers outperformed the indexes.
Also, here is an analysis of long-term performance trends using the Morningstar Market Barometer.
Sanjay Arya is director of Morningstar Indexes.