Style Box Update: Small- And Mid-Cap 'Value' Closes Performance Gap Vs. Growth

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Includes: DIA, EMB, HYG, IJJ, IJK, IJS, IJT, IVE, IVW, IWM, JNK, MBB, MDY, SPY, TLT
by: Brian Gilmartin, CFA
Summary

"Value" hasn't significantly outperformed "Growth" since 2016 and even then it was only for a year or so.

Small- and mid-cap value sub-sectors are starting to perform better relative to growth.

With the correction of Q4 '18, perhaps now value starts to reassert itself.

"Value" hasn't significantly outperformed "Growth" since 2016 and even then it was only for a year or so.

Is now the time where value investing comes back in vogue?

Small- and mid-cap value sub-sectors are starting to perform better relative to growth. For large-cap, the growth outperformance is still material (i.e. 200 bps YTD as of 5/10/19).

Here is the early April 2019 Style Box Update and then the mid-February 2019 update.

Summary/conclusion: The consistent theme for the first 4-5 months of 2019 is that small- and mid-cap value have been narrowing the performance differential over growth, but it's been a slow transition. The last decent correction that ended in Q1 '16 saw large-cap growth outperform substantially. With the correction of Q4 '18, perhaps now value starts to reassert itself.

Thanks for reading.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.