Industry Voice: Sticking With Value

Despite strong fundamentals, growth stock valuations are extreme

clock • 2 min read
Industry Voice: Sticking With Value

From November 2020 to early May 2021, U.S. value stocks generated strong absolute and relative performance versus U.S. growth stocks, a trend also seen in global equity markets. However, the value rally has recently fizzled, and growth stocks have regained ground, narrowing the performance gap considerably.

While somewhat unexpected, the resurgence in growth stocks is supported by their attractive fundamentals—very strong revenue growth amid increasing margins over the past 10 years—versus value stocks. Going forward, investors should weigh whether or not these trends that have boosted growth stocks over the past decade will continue to prevail.

 

 

 

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