QuantStreet February 2025 Letter: More of the Same

January 2025 Recap

The DeepSeek blip notwithstanding (our initial take on the news is here), January 2025 was a good month for financial markets. The S&P 500 was up a robust 2.7%, though Nasdaq lagged (largely due to DeepSeek, in our opinion) with “only” a 1.7% monthly return. Leading the charge were gold and bitcoin, while the dollar took a respite from its own recent breakneck pace of appreciation. Value and momentum both did well in January, and some recent sector themes—financials, communications, utilities—continued to provide market leadership.

perfomance

Most surprisingly, for the first time in a while, international stocks outperformed their U.S. counterparts. Perhaps DeepSeek again played a role as international markets cheered technological developments coming from someplace other than the U.S. (despite fears that some of this progress was plagiarized). Even bonds didn’t have a down month, which is unusual given recent price action.

QuantStreet had a pretty good month in January 2025, moving largely in line with our asset allocation mutual fund benchmarks. The in-line move breaks a recent streak of QuantStreet outperformance, which has been largely on the back of our U.S. overweight relative to the mutual fund benchmarks’ much heavier international equity allocation (often between 30-40% of the overall portfolio). You can read more about our performance results here.