Growth or value? It’s a question advisors and allocators ponder at every potential turning point in the market cycle. But as the world emerges from a pandemic-induced lockdown, the new investment environment may favor neither.
Instead, we believe heavy tilts toward either style box could punish investors in the coming quarters. Here’s the short case for why:
Scarcity of Growth Has Created a Crowding Effect Among Growth Stocks
So far this year, growth has outperformed value substantially. If the Russell 1000 Growth and Russell 1000 Value Index ended the year where they were at in mid-May, the growth index would have outperformed its value counterpart by the widest level in any year since 1999.¹