In 2017, as of December 5, the US all cap Russell 3000® Growth Index has a return of nearly 27% against an 11.5% return for the Russell 3000 Value Index. However, in the last month (since November 5) the tables have turned, with the Russell 3000 Value Index’s 2.5% return relative to a 1.2% return for the Russell 3000 Growth Index for the same time period.*
Alec Young – MD, global markets research, FTSE Russell:
“Several factors are driving value indexes’ recent resurgence. First, the sheer magnitude of growth indexes’ YTD outperformance has fueled portfolio rebalancing into value in anticipation of mean reversion. Second, the increased likelihood of tax reform legislation has boosted investors’ economic optimism, helping value stock indexes, which tend to be more cyclical than their growth counterparts. In addition, value indexes have benefitted from greater exposure to domestic industries like Financials and Telecommunications that are seen as potentially benefiting the most from tax reform and have thus risen sharply of late.”
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*Source: FTSE Russell, data as of December 5, 2017. Past performance is no guarantee of future results.
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