UBS Equities-US Style Guide _Low Vol and Quality outperform in November_ ...-119141167

ab1 December 2025Global ResearchUS Style GuideLow Vol and Quality outperform in November Market PerformanceMarket trended lower most of November, before rallying in the last week to end the month slightly up (both S&P 500 and Russell 1000 +0.2). Small caps fared better than large caps (Russell 2000 +1.0%). The majority of S&P sectors posted positive gains, led by Health Care (+9.3%), Communications Services (+6.4%) and Materials (+4.2%) while Information Technology (-4.3%), Consumer Discretionary (-2.4%) and Industrials (-0.9%) trailed. Despite concerns about inflation and consumer confidence, YTD market growth continues (S&P 500 up +17.8%, Russell 1000 up +12.5%). Factor OverviewFactor performance was largely mixed across factor cohorts. After trailing for most of the year, Delta Quality and Low Risk outperformed while Momentum and Size underperformed (Figure 1Style Factor Performance, Most Recent Month). The best performing factor was Delta Quality (+15%) followed by Fundamental Growth (+7.7%) and Low Price Beta (+7.4%). The worst performers were Size (Lg vs Sm) (-2.9%) and Price Momentum (12m) (-2.7%) (Figure 7Long-Short). Factor valuations show most are expensive vs history, with the exception of Low Price Beta and FCF Yield (Figure 6US forecast PE in diferent factors ).Investing Environment OverviewMacro factor importance remains at 30%. The largest contributors were US Yield 2Y at ~26% and US 10Y-2Y Spread at around 2%, while Crude Oil and Gold remain negligible (Figure 2US macro drivers through time). Cross-sectional volatility edged higher (Figure 3Cros-sectional volatility), while pairwise correlation ticked lower (Figure 4Average pairwise corelation). Across market valuations (Figure 5Market forecast PE in diferent universes), Large Caps remain expensive along with most sectors, exceptions being Real Estate (undervalued at 25th percentile), and Energy (near historic median). Industrials and Comm Services continue to be expensive, currently near historical valuation highs.Figure 1: Style Factor Performance, Most Recent MonthSource: FactSet, UBS Quantitative DatabaseThis report has been prepared by UBS Securities LLC. NA ANALYST CERTIFICATION AND REQUIRED DISCLOSURES, including information on the Quantitative Research Review published by UBS, begin on page 12. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.EquitiesAmericasQuantitativeJaiwish NolanAnalystjaiwish.nolan@ubs.com+1-212-713 1489Paul WinterAnalystpaul-j.winter@ubs.com+61-2-9324 2080Augusto Espin, PhDAnalystaugusto.espin@ubs.com+1-212-713 4802Oliver Antrobus, CFAAnalystoliver.antrobus@ubs.com+61-3-9242 6467Sophia ElliottAnalystsophia.elliott@ubs.com+1-212-882 5248Nicolo MenezAnalystnicolo.menez@ubs.com