• Bryce Johnson

Growth Over Value Continues

What's been a decade-long trend, its happening in 2020 is somewhat unique

The growth sector is rounding out ten years of massively outperforming value stocks, driven not only from the headline FAANG stocks but almost equally as much from small growth stocks as well.

Nothing new to see here. But what's interesting is that typically Value outperforms Growth during more volatile periods. Growth stocks, for the most part, trade at higher earnings and book value multiples than the stable-cash-flows and dividend paying stocks that define their Value counterparts. But 2020 for all of its extraordinary ways, added this peculiarity because...well, because 2020 is full of surprises, I guess. As you can see in the table below, the last time small, mid and large cap value stocks all outperformed growth was in 2016. It was the decade prior -- in an era where value consistently outperformed growth -- that value in all three spaces.

CoreTactic Strategies has integrated a slight over weighting towards growth since 2017. Our approach will continue incorporating this strategy until rates begin to normalize upwards. Until then, we expect growth to continue its dominance in the equities space.