Making Sense of the Current Growth vs. Value Dynamic
Since the market bottom of the Great Financial Crisis in March 2009, the Russell 1000 Growth Index (R1G) has outperformed the Russell 1000 Value Index (R1V) by over 300 per cent cumulatively. Many seem fearful that this current era of growth style dominance will end with the same thud as its 1990s predecessor.
Despite the appearance of style déjà vu, Polen think this current cycle of growth outperforming value is different for several reasons, including:
- Current P/E levels relative to the 90s combined with a low interest rate environment, in Polen’s opinion, indicates that earnings growth has been a more significant driver of the recent outperformance.
- Polen’s research shows the top contributors to the R1G’s performance saw far more economic value accrue to their businesses relative to their R1V counterparts.
- The full promise of the internet boom is now being realized.
Download the whitepaper here.
On 20 April 2021 we are hosting a live webinar with Damon Ficklin and Jeff Mueller from the Polen Global Growth team joining us live from Boca Raton, Florida, to introduce Polen and their special style of investing. You can register for the webinar here.
Established in 1979, Polen Capital is a high conviction growth investment manager with offices in the US and UK. Polen has been dedicated to serving investors by providing concentrated portfolios of the highest-quality companies for more than three decades. The firm’s established team manages US$71 billion in total assets and their longest-running flagship investment strategy has delivered on average double digit annual returns for more than 30 years.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
