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If you click on the chart above, you'll see a detailed view of 2007 performance for four Vanguard style indexes: small cap growth (NYSEARCA:VBK), small cap value (NYSEARCA:VBR), large cap growth (NYSEARCA:VUG), and large cap value (NYSEARCA:VTV).

The laggard over the course of the year has been value, with small cap value actually in the red for the year.

Since July, however, we've seen a style shift. Here's how the indexes have fared since their July peak:

VBK: -6.16%
VBR: -8.84%
VUG: -3.08%
VTV: -4.68%

Clearly small caps have underperformed large caps during the recent market turmoil. One possible reason is that a weaker dollar is more likely to benefit multinational companies with a significant proportion of sales overseas. These are more likely to be found in the large cap universe.

In my next post, we'll examine returns across the style cube.

Source: Style Box Shift: Smallcaps, Value Now Underperforming