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Investors Continue to Favor Growth Stocks over Value Stocks in 2018

Oct 16, 2018

 

  • The Russell 1000 Growth Index ETF (RLG) has generated YTD returns of +11.83% while the Russell 1000 Value Index ETF (RLV) is negative so far in 2018 with YTD returns of +0.98%
     
  • Growth stocks outperforming value stocks in 2018 is a continuation of trends that have driven US stocks markets the past few years where investors continue to favor growth stocks at the expense of value stocks.
     
  • In October, where global markets have generally experienced a downtrend in valuations, value stocks have outperformed growth stocks -- the RLG has generated MTD returns of –4.49% while the RLV has generated MTD returns of –2.82%.
     
  • Are we finally entering a new regime change where value stocks will begin to outperform growth stocks?  Does it make sense for investors to shift their allocations away from growth stocks to value stocks if we are nearing the end of the most recent bull market?

 

Source: Bloomberg

Russell 1000 Factor Performance

*Data in Price Return as of Previous Day's EOD, Source: StockDio