Growth is the new core: Why investors may need to reassess portfolio risk

In the wake of Morningstar's 2024 revisions to their Style BoxTM methodology, many stocks previously classified as "growth" have transitioned to "blend," with some "blend" stocks now labeled as "value." This reclassification has led core holdings to lean toward higher beta and valuations, coupled with lower dividend yields. Consequently, investors might unknowingly face increased portfolio risk.

To align more closely with the prior risk profile, there's an opportunity for investors to focus on high-quality strategies that emphasize resilient business models and a modestly lower beta profile. As US equities continue dominating global indexes—accounting for over 50% of total net assets—it becomes crucial for investors to reassess their portfolios amid evolving market conditions and style shifts.