Value v Growth

In the UK the Investors Chronicle magazine this week has an article as
follows:

"VALUE STOCKS PERFORMANCE DISASTER

Value stocks have begun to underperform growth. In the past month, the
FTSE350 high-yield index has underperformed the low-yield index by 2.6
percentage points. That's one of the worst monthly performances since
the peak of the technology bubble in 2000. Value stocks have now
underperformed growth in the past 12 months.

The move reflects a shift in macroeconomic conditions. With retail sales
faltering, as the Confederation of British Industry reported this week,
and index-linked gilt yields (the risk-free rate at which long-term cash
flows are discounted) falling, growth stocks should outperform value."

This is also reflected in my contest portfolios. The high-yield one
"DavidOH" has been stuck at about the same value for weeks now even
though the index has risen. In contrast, the "David" portfolio, which is
now a growth one, was well behind the index a month or so ago but has
now overtaken both the index and DavidOH.

Re: Value v Growth

"David Wilkinson" <> wrote

> In the UK the Investors Chronicle magazine this week has an article as
> follows:
>
> "VALUE STOCKS PERFORMANCE DISASTER
>
> Value stocks have begun to underperform growth. In the past month, the
> FTSE350 high-yield index has underperformed the low-yield index by 2.6
> percentage points. That's one of the worst monthly performances since the
> peak of the technology bubble in 2000. Value stocks have now
> underperformed growth in the past 12 months.

Not here. Value still rules.


Russell puts their indices into 4 groups:
Broad-Market Indexes
Large-Cap Indexes
Mid-Cap Indexes
Small-Cap Indexes

Here are the winners in each group year-to-date:

Broad-Market Indexes
Russell 3000® Value Index, +5.70%

Large-Cap Indexes
Russell 1000® Value Index, +5.53%

Mid-Cap Indexes
Russell Midcap® Value Index, +11.30%

Small-Cap Indexes
Russell 2500T Value Index +9.66%

Here are the winners for 10 years, annualized:

Broad-Market Indexes
Russell 3000® Value Index, +12.06%

Large-Cap Indexes
Russell 1000® Value Index, +11.96%

Mid-Cap Indexes
Russell Midcap® Value Index, +14.42%

Small-Cap Indexes
Russell 2500T Value Index +14.87%

Value beat growth and blend in every group.
The same 4 indexes led for both year to date and ten years.

Re: Value v Growth

Ed wrote:
>
> "David Wilkinson" <> wrote
>
> > In the UK the Investors Chronicle magazine this week has an article
> > as follows:
> >
> > "VALUE STOCKS PERFORMANCE DISASTER
> >
> > Value stocks have begun to underperform growth. In the past month,
> > ...

> Not here. Value still rules.
> ...
> Here are the winners in each group year-to-date:
> ...

Apples and oranges. Check the time frames. In the past month, growth
has outperformed value, e.g.

Vanguard Value Index (4 week): 0.51%
S&P 500 : 1.32%
Vanguard Growth Index : 1.93%

Three month returns show similar differences, yet YTD shows value
leading.

All data from Morningstar.

--
Mark Freeland

Re: Value v Growth

"Mark Freeland" <> wrote

>> "David Wilkinson" <> wrote
>>
>> > In the UK the Investors Chronicle magazine this week has an article
>> > as follows:
>> >
>> > "VALUE STOCKS PERFORMANCE DISASTER
>> >
>> > Value stocks have begun to underperform growth. In the past month,
>> > ...
>
>> Not here. Value still rules.
>> ...
>> Here are the winners in each group year-to-date:

> Apples and oranges. Check the time frames. In the past month, growth
> has outperformed value, e.g.

Apples and oranges? I didn't think you were a trader.
Yes it's true, growth is leading very recently but I won't go there.

> Vanguard Value Index (4 week): 0.51%
> S&P 500 : 1.32%
> Vanguard Growth Index : 1.93%
>
> Three month returns show similar differences, yet YTD shows value
> leading.

> All data from Morningstar.

Morningstar had the Japan Fund 100% invested in US securities at one time.

Re: Value v Growth

Ed wrote:
>
>
> > Vanguard Value Index (4 week): 0.51%
> > S&P 500 : 1.32%
> > Vanguard Growth Index : 1.93%
> >
> > Three month returns show similar differences, yet YTD shows value
> > leading.
>
> > All data from Morningstar.
>
> Morningstar had the Japan Fund 100% invested in US securities at
> one time.

I don't think the Morningstar figures I gave were untrustworthy, but
just as a check:

From Yahoo, comparing adjusted closes on Aug 5 and July 8 (4 weeks):

Vanguard Value Index: 21.86/21.75 - 1 = 0.506%
Vanguard Growth Index: 26.96/26.45 - 1 = 1.928%

For S&P 500, total return:
S&P 500, total return quarter to date (Jul 1 through Aug 5): 3.09%
S&P 500, total return quarter to date (Jul 1 through July 8): 1.77%

This means that total return between July 8 and Aug 5 =
(1 + TR Quarter to Aug 5)/(1 + TR quarter to July 8) - 1 =
(1 + 0.0309)/(1 + 0.0177) - 1 = 1.297%


--
Mark Freeland