Russ describes the reasons why growth stocks can still outperform value.
People will always prize what is scarce. Given an increasingly erratic trade dispute, low-to-negative interest rates and softening economic growth, investors are justifiably putting a premium on hedges, yield and earnings growth. The latter dynamic helps explains why, despite a relatively high premium, growth stocks continue to beat value. To the extent economic growth is unlikely to quickly rebound, this trend is likely to continue.
I last wrote about growth and value in early June. During the past three months, U.S. growth outperformance