Value Vs. Growth Since 1979

I’m glad to see that FRED, the St. Louis Fed’s Data Library, has added the Russell indexes to their database. Here’s a look at the Russell 3000 Value Total Return Index divided by its Growth counterpart:

Value has indeed beaten Growth over the long run but the premium hasn’t been terribly impressive, about 1.3% per year. Since 1988, it’s run about 0.6%. (That’s Value over Growth, not over the entire market.) Perhaps more surprising is how volatile the Value premium has been. In fact, there have been 20-year stretches where Growth has outperformed. We’re currently in a 12-year winning streak for Growth.

Value does work, but it takes a lot of time.

Posted by on February 9th, 2015 at 2:51 pm


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