- Up and down the cap spectrum and beyond the shores of the US, value has had a strong start to 2021
- Will this rally continue?
The resurgence of value stocks has been a dominant theme over the past few months, culminating in the largest monthly excess return over growth stocks in February (9% and a two standard deviation event) since 20081. And it hasn’t been just large-cap value that has produced strong above market returns. Up and down the cap spectrum and beyond the shores of the US, value has had a strong start to 2021, as well as over the past four months as the dual headwinds of election and vaccine timeline uncertainty were removed.
Today’s question to the value bulls that have played the part of Charlie Brown over the past decade only to have the market (Lucy) pull the ball away, is whether the rally will continue. Let’s review some data to gauge the strength and pervasiveness of this value rally.
The run-up in value has not been confined to one specific market, or construction philosophy . As shown below, fourteen different value approaches (ranging from sector neutral to small cap to emerging market) have outperformed their respective broad market segments both in 2021 and since the end of October – with the average excess return of 6% and 10%, respectively.
1Based on the returns of the S&P 500 Pure Value Index and the S&P 500 Index based on data from 1995 per Bloomberg Finance L.P. as of February 28, 2021
Originally Posted on March 10, 2021 – How Deep Is the Value Rally?
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