Through the close of markets on Monday, the S&P 500 ETF (SPY) was up 9.8% on the year.
That’s a great return six months into the year.
Surprisingly, it’s not the concentration at the top that’s carrying the returns anymore:
The S&P 493 is outperforming the S&P 500 and the Mag 7 by a wide margin. Ironically, the hyperscalers spending so much money on AI could be benefitting the rest of the market to their own detriment.
In fact, the S&P 500 is up around 10% this year despite the fact that companies like Microsoft, Meta, Oracle and more tech stocks are in relatively large corrections at the moment:
You might also be surprised to know that all kinds of other asset classes and types of stocks are beating the S&P 500 this year.
Here’s a list of the asset classes outperforming the S&P 500 in 2026 through the close on Monday:
Small caps (IWM) +21.7%
Value stocks (VTV) +15.1%
Small cap value (AVUV) +20.9%
Emerging markets (EEM) +30.8%
REITs (VNQ) +10.3%
Mid caps (VO) +11.3%
Dividend stocks (VYM) +11.7%
This is a welcomed change for diversified investors.
For years people worried about concentration in the stock market and what it meant to have a handful of stocks powering the market. I’ve had countless conversations with investors who wondered why they shouldn’t just have all of their money invested in the S&P 500.
Obviously, it’s not like the S&P 500 is having a bad year. It’s up almost 10% midway through the year!
But other asset classes are finally working.
Emerging markets have now beaten the S&P 500 over the past three years:
Small cap value has crushed the S&P since the Covid lows:
Small cap stocks have been on fire from the Liberation Day lows:
