March 13, 1998

Data published by Standard & Poors on the performance of growth and value indices show that, over the last 23 years, growth stocks have outperformed value stocks roughly half the time - 12 years vs. 11 years. However, the average annual performance shows a somewhat different picture. The average gain of the value index exceeds that of the growth index by approximately 161 basis points (17.49% vs. 15.88%). Looking further, the data suggest systematic patterns in the relative performance of the two groups (Figure 1). A possible explanation is that changing economic environments alter the relative attractiveness of value and growth stocks. We believe the value/growth effect may be affected by the interaction of the tax code, government regulations and the inflation rate.

You must have an active account to view these reports. You may register for a trial here

Download Complete Report in PDF Format

Download Complete Report in Word Format