Industry Voice: How Far Are We in This Value Rotation?

A quantitative perspective

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Industry Voice: How Far Are We in This Value Rotation?

Global multi‑asset portfolios at T. Rowe Price start from a diversified position between the value and growth investment styles. We deviate from the neutral position based on our tactical asset allocation views for the next six to 18 months. These views are defined using a wide range of quantitative and qualitative inputs.

For the first time in about 10 years, we began to overweight value versus growth in September 2020. Since then, the value style outperformed the growth style significantly. One way to measure this rotation from growth to value is to look at the short‑term divergence of factor returns. We define a factor portfolio for value and growth as a long‑short portfolio.  The long position is the top quintile of stocks representing the factor, and the short position is the bottom quintile of stocks representing the factor.

 

 

 

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This material is being furnished for general informational purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, and prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources' accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date noted on the material and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

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It is not intended for distribution to retail investors in any jurisdiction.

This material is issued and approved by T. Rowe Price International Ltd, 60 Queen Victoria Street, London, EC4N 4TZ which is authorised and regulated by the UK Financial Conduct Authority. For Professional Clients only.

© 2021 T. Rowe Price. All rights reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the bighorn sheep design are, collectively and/or apart, trademarks or registered trademarks of T. Rowe Price Group, Inc.

 

 

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