Our Market Optics chartbook contains data-driven insights that power our portfolio management teams’ views, ideas, and decisions. Each week, we’ll take a look a closer look at one of the charts.
This week’s topic: Equities: Value, growth, and yields
- Lower yields have coincided with the growth style outperforming the value style. Growth equities typically have longer-dated cash flows as the basis for their valuations, so lower yields make those cash flows more valuable.
- Now that Treasury yields have moved higher, value has been outperforming growth. A brighter economic outlook could help push Treasury yields slightly higher and perhaps help close some of the performance gap that was created over the past few years between value and growth stocks.
All investing involves risks, including the possible loss of principal. There can be no assurance that any investment strategy will be successful. Investments fluctuate with changes in market and economic conditions and in different environments due to numerous factors, some of which may be unpredictable. Each asset class has its own risk and return characteristics.