Style guide

May 25, 2020 | Jay Zhang


Growth vs. value, it’s an age-old debate. Given the COVID-19 dynamics of today’s equity market, which style is more apropos?


Growth stocks have powered ahead of value stocks since the Mar. 23 low and are outperforming significantly for the year, whether in the U.S. or globally.

The performance difference in the U.S. is a meaningful 22.5 percentage points, as the chart shows. The gap in performance between other developed and emerging country growth and value stocks is also wide, at a non-trivial 16.2 percentage point difference year to date.

The reality is, value has lagged for a long time. It has had a few periods of brief out performance in the U.S. and elsewhere since the Great Recession ended a little more than a decade ago, but overall it has trailed growth badly. Since the beginning of 2010, the U.S. Russell 1000 Growth Index has risen 264 percent, while the companion Value Index has risen only 91 percent.


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