Tag Archives: S&P 500 Value
Sizing Up Style Returns
After more than a decade of underperformance, and in stark contrast to Growth’s dominance for much of 2020, Value has made an impressive comeback so far in 2021, outperforming Growth around the world, including across the size spectrum in the U.S. In fact, Value’s YTD outperformance against Growth in mid and small caps is the…
Riding the Value Wave
U.S. equity markets seemed to undergo a fundamental change of direction in September of last year. Exhibit 1 illustrates the shift; our growth indices, which had outperformed value handily through the end of August, have lagged ever since. The spreads between growth and value are even greater when we compute them using our Pure Growth…
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Style Rotation through the Revenue Exposure Lens
One of the major trends in the last few years has been the outperformance of large, growth-oriented stocks and, at first glance, 2020 represented a continuation of this trend. For example, the S&P 500® Growth (33.5%) outperformed the S&P 500 Value (1.4%) by 32.1% last year, the largest difference in calendar year total returns between…
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Rotating Between Growth and Value: The S&P 500® Growth Value Rotator Index
Growth and value are two investment styles based on fundamental analysis. A growth company typically has promising earnings potential and tends to invest more in future growth rather than dividend payouts, while a value company tends to be more established, with stable growth rates and dividend distributions. While most market participants are familiar with single-style…
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Confusing Style and Selection
A headline from yesterday was very intriguing: “Why investors crave a return to the art of stock-picking.” Copious data demonstrate the peril of placing hope in active management. The article argues that since we seem to be in a trend that favors value, it is a good time for managers to pick stocks based on…
An Unfair Fight: Value Managers Were Crushed
When I was in the U.S. Army, the doctrine for an attack specified a desired ratio of at least three of us versus every one of them. This would help to ensure an unfair fight. When your life is on the line, you want the odds in your favor. Why should that desire to tilt…
Value Versus Growth: A Sector Perspective
One of the most persistent trends over the last decade has been the underperformance of value compared to growth. The S&P 500 Growth beat its Value counterpart in eight of the last ten full calendar years, and growth is currently on track to outperform in 2018 (you can find year-to-date figures on page four of our…
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Understanding the Value Spectrum
Value investing, made famous by Benjamin Graham in his book Intelligent Investor nearly 70 years ago, is possibly the most well-known investment strategy. Although the strategy may appear simple at first glance—buying securities with prices that are trading at discount multiples than their fundamental values—it can be tricky to implement. For example, value can be…
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Pure Style Eliminates the Muddle in the Middle
Financial advisors who implement style investing seek to outperform the blended benchmark whenever they believe that market conditions will favor either a growth or a value approach. Their view could be influenced by research, fundamental factors, or technicals. To implement such a view does not require 100% conviction in either growth or value. In fact,…
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Losing My Religion: Value in the USA
If simple is beautiful, then value investing is the equity market’s Helen of Troy – the faith that launched a thousand funds. If a company’s assets or profits are high in relation to its share price, it does not require much imagination to suppose that such company might offer attractive long-term investment prospects. Value is…
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