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. Spoiler Alert: Value stocks are significantly outperforming growth stocks so far in 2021. 
  3. As indicated in the chart above, the S&P 500 Pure Growth Index significantly outperformed its value counterpart in five of the six periods. The YTD comparison is the story today. 
  4. The total returns through 2/23/20 were as follows (Pure Growth vs. Pure Value): 15-year avg. annual (12.10% vs. 8.56%); 10-year avg. annual (15.13% vs. 11.37%); 5-year avg. annual (18.87% vs. 11.92%); 3-year avg. annual (15.15% vs. 4.47%); 1-year (26.42% vs. 8.65%); and year-to-date (2.27% vs. 15.02%).
  5. As of 1/29/21, the largest sector weighting in the S&P 500 Pure Growth Index was Information Technology at 39.6%, according to S&P Dow Jones Indices. The largest sector weighting in the S&P 500 Pure Value Index was Financials at 40.3%.
  6. From 12/31/20 through 2/23/21, the S&P 500 Information Technology Index posted a total return of 1.79%, compared to 11.55% for the S&P 500 Financials Index, according to Bloomberg. The S&P 500 Index was up 3.56% over the same period.
  7. Financials, particularly the banks, are benefitting from the rise in bond yields so far in 2021, in our opinion. The yield on the 10-year Treasury note has risen from 0.92% at the close on 12/31/20 to 1.34% on 2/23/21, according to data from Bloomberg.  

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 Thursday, February 25, 2021 @ 1:50 PM • 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
• A Global Snapshot Of Government Bond Yields
• September 30, 1981
• Sector Performance Via Market Capitalization
• Technology Stocks Have Delivered Strong Returns Since The End Of The Financial Crisis-Induced Bear Market
• A Snapshot Of Growth vs. Value Investing (Small-Caps)
• Assets Held By Equity ETFs And Equity Mutual Funds Have Surged
• The Great Rotation Out Of Bond Mutual Funds Never Happened
• A Snapshot Of Stock Performance Relative To Historical U.S. Inflation Rates
• The Tech Sector Has Been The “Gold Standard” For 15 Years
• Passive vs. Active Fund Flows
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011

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.