Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Bio
X •  LinkedIn
 

  A Snapshot of Growth vs. Value Investing
Posted Under: Themes
Supporting Image for Blog Post

 
View from the Observation Deck   
  1. We update this post every few months so that investors can see which of the two styles (growth or value) are delivering the better results. 
  2. The most recent results show that value stocks are outperforming growth stocks significantly on a 1-year and year-to-date basis.  
  3. Having said that, the S&P 500 Pure Growth Index outperformed its value counterpart in four of the six periods featured in the chart above.  
  4. The total returns through 3/11/22 were as follows (Pure Growth vs. Pure Value): 15-year avg. annual (11.77% vs. 8.63%); 10-year avg. annual (14.37% vs. 12.35%); 5-year avg. annual (14.47% vs. 9.15%); 3-year avg. annual (15.25% vs. 11.69%); 1-year (3.33% vs. 10.88%); and year-to-date (-20.44% vs. 1.11%).
  5. As of 2/28/22, the largest sector weighting in the S&P 500 Pure Growth Index was Information Technology at 35.4%, according to S&P Dow Jones Indices. The largest sector weighting in the S&P 500 Pure Value Index was Financials at 32.1%.
  6. From 12/31/21 through 3/11/22 (YTD), the S&P 500 Information Technology Index posted a total return of -17.23%, compared to -6.75% for the S&P 500 Financials Index, according to Bloomberg. The S&P 500 Index was down 11.53% over the same period. 
  7. Value stocks have tended to outperform growth stocks when the yield on the benchmark 10-year Treasury note (T-note) rises, and vice versa. In the current climate, the yield on the 10-year T-note is rising. 
  8. From 12/31/21-3/11/22 (YTD), the yield on the 10-year T-note rose sharply from 1.51% to 2.00%, or 49 basis points, according to Bloomberg. As noted in point #4, year-to-date through 3/11/22, the S&P 500 Pure Value Index posted a total return of 1.11%, compared to -20.44% for the S&P 500 Pure Growth Index. The S&P 500 Pure Value Index return has been bolstered some by its exposure to energy and utilities. They are the only sectors that have outperformed financials so far in 2022. 
This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance. The S&P 500 Pure Growth Index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest growth characteristics based on three factors: sales growth, the ratio of earnings-change to price, and momentum. It includes only those components of the parent index that exhibit strong growth characteristics, and weights them by growth score. Constituents are drawn from the S&P 500 Index. The S&P 500 Pure Value Index is a style-concentrated index designed to track the performance of stocks that exhibit the strongest value characteristics based on three factors: the ratios of book value, earnings, and sales to price. It includes only those components of the parent index that exhibit strong value characteristics, and weights them by value score.

Download a PDF of this post, please click here.
Posted on Tuesday, March 15, 2022 @ 11:02 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
Sector Performance Via Market Cap. (2020-2021 and YTD-3/9/22)
A Perspective On Crude Oil Prices
A Snapshot Of The U.S. Dollar
A Snapshot Of Bond Valuations
A Snapshot Of The Last Four 10%-Plus Declines In The S&P 500 Index
A Snapshot Of Gold, Silver And The Miners
Top-Performing S&P 500 Index Subsectors YTD (Thru 2/15)
Rising Bond Yields And Stock Performance
This Covered Call Index Tends To Outperform The S&P 500 When Returns Are Modest Or Down
S&P 500 Index Earnings & Revenue Growth Rate Projections
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.