Is Value No Longer Value?

This weekend’s Barron’s had an interesting article touting the turn for value. They may be right, but it’s been a rough time for value. The Russell 1000 Value Index peaked against the regular Russell 1000 in August 2006. In other words, Value has been lagging the market for nearly 12 years.

What’s interesting is that Value tends to lead when short-term rates are rising. But since the Fed started hiking rates, Value has continued to trail. Check out the last part of this chart:

What’s going on? Is Value about to catch up, or is the relationship broken. In finance, whenever I see a relationship diverge, I try to not blame the market. Instead, it’s likely that whatever drove the previous relationship has broken down.

Posted by on April 30th, 2018 at 1:33 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.