Style-Box Update: Growth Starts 2023 Well

  • What’s interesting is that to start 2023, large-cap growth has outperformed large-cap value by 1 basis point.
  • In the mid-cap and small-cap asset classes, value continues to outperform growth, just on a smaller scale than on 2022;
  • For the 1-year time frame, growth across all asset classes continues to show a loss for the 1-year time frame, while value has a positive return for the 1-year time period and beyond;

The attached spreadsheet is probably confusing but it’s the simplest way to quickly organize and update the data every 6 weeks.

Value outperformed growth smartly in 2022, the first time that’s happened in the large-cap space since 2016.

Growth has narrowed the difference in 2023, but it’s still early in the year.

The 2nd section of data on the spreadsheet, roughly from lines 18 to 26, shows the 1,3,5, 10 and 15 year returns of the iShares growth and value ETF’s by large-cap, mid-cap and small-cap.

Note the large-cap growth returns across the 1 to 15 year time frames. That may keep a lid on the asset class “exuberance” for a while.

Summary / conclusion: 2022 was badly needed as a “reset” year for the US stock market across large-cap growth in particular, but if readers would look at 10 and 15 year returns across large-cap through small-cap, a case could be made for muted, conservative returns across all asset classes for some time. That doesn’t mean “sharply negative” returns, just muted upside.

We don’t know though, and so much depends on US monetary policy.

It could also mean that it’s time to look at non-US equity markets.

Past performance is no guarantee of future results.

These style-box updates are meant to be “quick-hit” posts. Short and sweet…

Thanks for reading.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.