US small-cap value outperforms by widest margin since 2nd world war
Beaten up US small-cap value stocks outperformed large-cap growth ones by the largest margin since the depths of the second world war in the six months to the end of March, data show.
The remarkable bounce back comes after a lengthy period in which small cap and value stocks have undershot the broader market, despite both being widely recognized in the academic papers as investment “style factors” that have historically generated long term outperformance.
As of October last year, value stocks were enduring their worst run in at least 200 years, according to one measure, leading some to question whether the value premium had been permanently erased by the changing structure of business.
However, data from Dimensional Fund Advisors, a $630bn Texan fund house, shows that US small value stocks returned a striking 76.8 per cent in the half year to March 31st, way ahead of the 14.4 per cent made by large growth companies.
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Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is registered as an investment adviser with the U.S. Securities and Exchange Commission (“SEC”) with its primary place of business in the state of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. References to registration with the SEC do not imply any endorsement or approval of the qualifications of the firm, nor do they imply that the firm’s representatives have attained a particular level of skill or training. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.
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