Student of the Market - BlackRock

Student of the Market

December 2020

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Student of the Market

December 2020

Stock market seasonality

Value versus growth

Small caps

International stocks

Long term stock and

bond returns

Fund flows

Low bond returns ahead?

Source: Morningstar as of 11/30/20. Past performance is no guarantee of future results. Index performance is shown for illustrativepurposes only. You cannot invest directly in an index.

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STOCK MARKET SEASONALITY

One of the best Novembers ever for stocks

Top 15 Novembers for U.S. stocks

Average return, 11/1/26 ? 11/30/20

Year 1928 1933 2020 1962 1980 1934 1954 1955 2001 1996 1927 1985 1990 1998 2009 Avg

November 12.9 11.3 11.0 10.9 10.7 9.4 9.1 8.3 7.7 7.6 7.2 6.9 6.5 6.1 6.0 8.8

Next 12 months -10.5 1.2 ? 21.5 -5.4 41.9 38.4 2.9 -16.5 28.5 46.9 27.7 20.3 20.9 9.9 16.3

Seasonal U.S. stock market performance

Average 1-year return following each cohort 1/1/26 ? 10/31/20

14.5%

16.3%

6.9%

After a negative After a positive After a top 15

November

November

November

Source: Morningstar as of 11/30/20. Stock market represented by the S&P 500 Index from 1/1/70 to 11/30/20 and IA SBBI U.S. large cap stocks index from 1/1/26 to 1/1/70. Past performance does not guarantee or indicatefuture results. Index performance is for illustrative purposes only. You cannot invest directly in the index.

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VALUE VERSUS GROWTH

Value outperforms growth last three months

Largest value outperformance since 2002

Value minus growth

3-month rolling returns, 1/1/79 ? 11/30/20 30

25 Value outperforms growth

20

Dec. 2000 24.9%

15

Nov. 2020

10

7.7%

5

0

-5

-10

-15 Growth outperforms Feb. 2000

-20

value

-20.4%

Aug. 2020 -16.4%

Value outperformance following a 3-month period where value

performed 7%+ more than growth

Average annualized return, value minus growth, 1/1/26 ? 10/31/20

6.2%

5.0%

1 year later

3 years later

Source: Morningstar as of 11/30/20. Large growth represented by the Russell 1000 growth Index and large value represented by the Russell 1000 value Index. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index.

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SMALL CAPS

Best month ever for small cap stocks

Top 15 months for U.S. small cap stocks

Average return, 11/1/79 ? 11/30/20

U.S. stock market performance

Average return , 1/1/26 ? 10/31/20

Nov-20 Feb-00 Apr-09 Oct-11 Oct-82 Apr-20 Jan-85 Sep-10 Aug-84 Jan-87 Dec-99 Jan-19 Jul-80 Feb-91 Nov-16

Avg

1-month return 18.4% 16.5% 15.5% 15.1% 14.4% 13.7% 13.2% 12.5% 11.8% 11.6% 11.3% 11.2% 11.2% 11.2% 11.2% 13.3%

1 year later ?

-22.1% 52.8% 13.1% 47.2%

? 14.0% -1.6% 11.2% -12.5% -3.6% 3.6% 45.1% 39.6% 16.9% 15.7%

14.2%

11.1%

15.7%

Large Caps (last 10 years)

Small Caps

Small Caps

(last 10 years) 1 year after a top

15 month

Source: Morningstar as of 11/30/20. Small caps represented by the Russell 2000 Index and largecap stocks by the S&P 500 index. Past performance does not guarantee or indicate futureresults. Index performance is for illustrativepurposes only. You cannot invest directly in the index.

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