SOURCE: Russell Investments

Russell Investments

September 23, 2015 12:22 ET

Value Watch: Growth Stocks Continue to Lead Value Stocks in 2015, yet Historical Trends Support Value When Fed Begins to Tighten; FTSE Russell

SEATTLE, WA--(Marketwired - Sep 23, 2015) - Growth-oriented US stocks, as measured by the US large-cap Russell 1000® Growth Index (+0.8%) and the US small-cap Russell 2000® Growth Index (-0.1%), have significantly outperformed their value-oriented counterparts, as measured by the US large-cap Russell 1000® Value Index (-8.5%) and US small-cap Russell 2000® Value Index (-8.4%), year-to-date as of September 22.

Yet for investors who analyze US markets through the lens of growth and value leadership, history has shown that US value stocks have traditionally led at the beginning of an extended Fed interest rate tightening.

A new research report from FTSE Russell -- A Stylish Look at the Fed -- a must read for style watchers, examines the performance of the Russell US large cap, small cap, value and growth indexes during the four periods of tightening monetary policy in the last 30 years. The report, as illustrated in the table below, shows that US small and large cap value stocks have traditionally outperformed their growth counterparts in the three months after the beginning of an extended rise in rates.

Tom Goodwin, Senior Research Director with FTSE Russell, said:
"While past index performance is certainly no guarantee of future results, historical analysis through a variety of market capitalization and style indexes can be a helpful tool for long term investors, particularly during periods of market volatility and uncertainty."

About FTSE Russell:
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 80 countries, covering 98% of the investable market globally.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Leading asset owners, asset managers, ETF providers and investment banks use FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance. FTSE Russell is also focused on index innovation and client collaboration as it seeks to enhance the breadth, depth and reach of its offering.

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© 2015 London Stock Exchange Group companies.

Views expressed by Tom Goodwin are as of September 23,, 2015 and are subject to change.

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