'Too much debt in system' is likely to make recent value/growth rotation transitory

Lauren Mason
clock • 9 min read

Equity investors could experience a "multi-year rally" in value stocks, according to some industry commentators, who believe the recent market rotation out of growth could be here to stay. Others have warned not to write off quality growth assets, however, given strong fundamentals and the fact there is "too much debt in the system" for central banks to upset the applecart.

Over the past decade, high-quality growth stocks have significantly outperformed their value counterparts following years of accommodative monetary policy. Data from FE fundinfo shows the MSCI ACWI Growth index has returned 310% over the last ten years to time of writing (17 January 2022), compared to the value index's gains of 160.2%. 'Back to the nineties': Industry reacts as UK inflation reaches 30-year high While a market rotation out of growth and into value stocks reared its head at the beginning of 2021, following the roll-out of Covid vaccination programmes globally, it proved...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Equities

Stock pickers urge caution over rapid return to US equities

Stock pickers urge caution over rapid return to US equities

Quilter and Fidelity

Linus Uhlig
clock 01 July 2025 • 1 min read
Deep Dive: US equities may not have peaked but do require greater selectivity

Deep Dive: US equities may not have peaked but do require greater selectivity

Amid equity rebalancing

Linus Uhlig
clock 13 June 2025 • 4 min read
Partner Insight: Robeco Emerging Markets Equities strategy - Targeting alpha in a new world of growth

Partner Insight: Robeco Emerging Markets Equities strategy - Targeting alpha in a new world of growth

Jan de Bruijn, Director, Emerging Market Equities, Robeco
clock 06 June 2025 • 5 min read
Trustpilot