JIG - What's Behind The Value-Growth Performance Gap?

• What was behind the prolonged winning streak for growth that created today’s extreme valuation gap?
• Our research shows that only 10 percentage points of the return gap between value and growth stocks since 2015 were driven by the difference in earnings and dividends.
• Even before the pandemic, investors pushed up share prices of growth stocks, while pushing down value stocks disproportionately to the actual disparity in profitability.
• By the end of March, the forecast profitability of value companies, as compared to growth companies, was well above average given expectations for a strong cyclical recovery.

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